08-003739 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Valou Enterprises, Inc., D/B/A Mr. Rooter Plumbing Status: Closed Recommended Order on Tuesday, April 28, 2009.

Summary: Petitioner proved that Respondent failed to secure workers` compensation insurance coverage for its employees. A penalty of $59,652.93 should be imposed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, DIVISION OF WORKERS' )

COMPENSATION, )

)

Petitioner, )

)

vs. ) Case No. 08-3739

)

VALOU ENTERPRISES, INC., d/b/a )

MR. ROOTER PLUMBING, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on November 7, 2008, by video teleconference, with the parties

appearing in Miami, Florida, before Patricia M. Hart, a duly-

designated Administrative Law Judge of the Division of

Administrative Hearings, who presided in Tallahassee, Florida.

APPEARANCES

For Petitioner: Kristian E. Dunn, Esquire

Justin H. Faulkner, Esquire

Department of Financial Services,

Division of Workers' Compensation

200 East Gaines Street

Tallahassee, Florida 32399-4229

For Respondent: Leslie McMillan, President

Valou Enterprises, Inc.

15980 Southwest 109 Street

Miami, Florida 33196

STATEMENT OF THE ISSUE

Whether the Respondent committed the violations alleged in

the Second Amended Order of Penalty Assessment filed October 17,

2008, and, if so, the penalty that should be imposed.

PRELIMINARY STATEMENT

On July 1, 2008, the Department of Financial Services,

Division of Workers' Compensation ("Department"), issued a Stop

Work Order directing Valou Enterprises, Inc., d/b/a Mr. Rooter

Plumbing ("Valou Enterprises"), to immediately stop work and

cease all business operations in Florida because it had failed

to obtain workers' compensation insurance meeting the

requirements of Chapter 440, Florida Statutes (2008), 1 and the

Florida Insurance Code. Based on the records the Department

received during its investigation, the Department calculated an

Amended Order of Penalty Assessment, which was issued on July 9,

2008, and which included an assessment of $95,652.93 in

penalties. Valou Enterprises timely filed its request for an

administrative hearing, and the Department transmitted the

matter to the Division of Administrative Hearings for the

assignment of an administrative law judge. Pursuant to notice,

the final hearing was held on November 7, 2008.

On October 20, 2008, the Department filed a Motion to Amend

Order of Penalty Assessment by decreasing the penalty to

$60,652.93. The motion was granted in an order entered

October 30, 2008, and the Second Amended Order of Penalty

Assessment was substituted for the Amended Order of Penalty

Assessment.

At the final hearing, the Department presented the

testimony of Ann Johnson, and Petitioner's Exhibits 1 through 11

were offered and received into evidence. Valou Enterprises

presented the testimony of Pedro Rolle, and Respondent's

Exhibits 2 through 8, 10, and 13 were offered and received into

evidence.

The one-volume transcript of the proceedings was filed with

the Division of Administrative Hearings on December 5, 2008.

After an extension of time for filing proposed recommended

orders was granted on December 12, 2008, the parties timely

filed proposed findings of fact and conclusions of law, which

have been considered in the preparation of this Recommended

Order.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

following findings of fact are made:

1. The Department is the state agency responsible for

enforcing the requirement of Section 440.107, Florida Statutes,

that employers in Florida secure workers' compensation insurance

coverage for their employees. § 440.107(3), Fla. Stat.

2. Valou Enterprises is a Florida corporation located in

Miami, Florida, which does business under the fictitious name of

"Mr. Rooter Plumbing" ("Mr. Rooter"). Leslie McMillan is part-

owner and the President of Valou Enterprises. Pedro Rolle is

part-owner and the Treasurer of Valou Enterprises, and he is

responsible for the business's day-to-day management. Welthial

McMillan is part-owner and the Secretary of Valou Enterprises.

3. Mr. Rooter is a franchise that engages in the business

of providing plumbing services and repairs. According to

franchise documents, among the services offered by Mr. Rooter

are HydroScrubbing™ sewer lines to remove blockages; water

heater installation; kitchen and bath installation and repairs,

including faucets, sinks, tubs and toilets; and leak detection

and water line repair and installation. 2 On its website, Valou

Enterprises advertises that Mr. Rooter provides full-service

plumbing, including bath sinks, bathtubs and showers, drain

pipes, faucets, floor drains, gas meters, gas vents, kitchen

sinks, pipe repair, sewer lines, and water softeners. 3

4. Mr. McMillan is a Florida-certified plumbing

contractor, and he is the qualifier for Mr. Rooter. Mr. and

Mrs. McMillan and Mr. Rolle, have elected, as officers of a

corporation engaged in the construction industry, to be exempt

from Florida's workers' compensation law, in accordance with the

provisions of Sections 440.02(15)(b)2. and 440.05(3), Florida

Statutes.

5. Valou Enterprises hires plumbing technicians to provide

plumbing services to Mr. Rooter's customers. These plumbing

technicians are not licensed; rather, they work under

Mr. McMillan's plumbing contractor's license. They do not

receive a salary and do not have regular hours during which they

must be at the Mr. Rooter office or at a jobsite. The plumbing

technicians are paid commissions based on the work they perform,

and they are required to supply their own tools. The plumbing

technicians are on-call with Mr. Rooter at all times, but they

only perform services for Mr. Rooter when actually dispatched to

a job. When a plumbing technician is called and notified of a

job, he is free either to accept or to reject the job.

Mr. Rooter also dispatches plumbing helpers when a plumbing

technician needs assistance.

6. Valou Enterprises employs Catia Duque, who takes calls

and dispatches plumbing technicians to Mr. Rooter jobs. Kenneth

Mecure runs errands for Valou Enterprises part-time when needed,

on a part-time basis.

7. Late in the afternoon on Friday, June 27, 2008, a

compliance investigator working for the Division of Workers'

Compensation stopped at the Mr. Rooter office, which was located

in a warehouse district. The visit was random, initiated when

the investigator saw white vans parked in front of the office,

with the name "Mr. Rooter Plumbing" and logo on the sides of the

vans. When the investigator entered the office, she observed

four men wearing shirts with the "Mr. Rooter Plumbing" logo.

8. When the investigator requested information about Valou

Enterprises's workers' compensation insurance coverage,

Mr. Rolle referred her to Ms. Duque. Ms. Duque told the

investigator that she would send whatever information she had

regarding workers' compensation insurance coverage by facsimile

transmittal, but the investigator did not receive any

information from Ms. Duque.

9. After her visit on June 27, 2008, the compliance

investigator conducted research through the Coverage and

Compliance Automated System database, which provides information

on workers' compensation insurance coverage and exemptions. The

investigator's research revealed that Mr. McMillan,

Mrs. McMillan, and Mr. Rolle had exemptions from the workers'

compensation law as officers of a corporation engaged in the

construction industry and that none of the persons she observed

in the Mr. Rooter office on June 27, 2008, were covered by a

workers' compensation insurance policy. The investigator

confirmed the lack of workers' compensation insurance coverage

by consulting the website for the National Council on

Compensation Insurance, Inc. ("NCCI").

10. The compliance investigator returned to the Mr. Rooter

office on Monday, July 1, 2008, and spoke with Mr. McMillan.

Mr. McMillan was unable to provide her with proof that Valou

Enterprises had workers' compensation insurance coverage. The

investigator then prepared a Stop-Work Order and an Order of

Penalty Assessment, which she hand-delivered to Mr. McMillan on

July 2, 2008, and posted at the Mr. Rooter office. At the same

time, the investigator served Mr. McMillan with a Request for

Production of Business Records for Penalty Assessment

Calculations.

11. The Stop-Work Order required Valou Enterprises to

"cease all business operations for all worksites in the state."

An Order of Penalty Assessment was included in the Stop-Work

Order, in which Valou Enterprises was advised that a penalty

would be assessed in an amount

[e]qual to 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 required by

this chapter within the preceding 3-year

period, or $1,000, whichever is greater.

Section 440.107(7)(d), F.S.

In addition, the Order of Penalty Assessment also advised Valou

Enterprises that a penalty of "[u]p to $5,000 for each employee

who the Employer misclassified as an independent contractor"

would be imposed pursuant to Sections 440.10(1)(f) and

440.107(7)(f), Florida Statutes.

12. On July 3, 2008, the compliance investigator returned

to the Mr. Rooter office. The office was closed, but she

observed a white van turning out of the office parking lot. The

van had the "Mr. Rooter Plumbing" name and logo on the side, and

it was driven by Michael Dassell, a plumbing technician the

investigator had met during her visit to the Mr. Rooter office

on July 27, 2008. The investigator questioned Mr. Dassell, who

told her that he was on-call that day. Mr. Dassell had not been

dispatched on a job or called into the office but had gone to

the office to pick up a commission check. Mr. Dassell had not

been told that the Mr. Rooter office was closed on July 3, 2008.

13. Mr. McMillan provided the compliance investigator the

payroll and other records requested in the business records

request. Based on these records, the compliance investigator

calculated the penalty to be imposed on Valou Enterprises for

its failure to have workers' compensation insurance coverage in

the amount of $59,652.93. The investigator also imposed a

penalty of $1,000.00 for a one-day violation of the Stop-Work

Order and a penalty of $35,000.00 for "misrepresenting the

status of the employee(s) as an independent contractor(s)." The

total penalty of $95,652.93 was set forth in an Amended Order of

Penalty Assessment that the investigator hand-delivered the

order to Mr. McMillan on July 9, 2008.

14. Valou Enterprises obtained workers' compensation

insurance coverage effective July 4, 2008, and, on July 9, 2008,

Mr. McMillan entered into a Payment Agreement Schedule for

Periodic Payment of Penalty, remitting at the time a down

payment of 10 percent of the penalty, or $9,566.00. As a

result, an Order of Conditional Release from Stop-Work Order was

entered on July 9, 2008.

15. The compliance investigator subsequently recalculated

the penalty assessment and prepared a 2nd Amended Order of

Penalty Assessment dated October 17, 2008. The $35,000.00

penalty assessed for misclassifying employees as independent

contractors was deleted for lack of evidence, and the final

penalty assessment was in the amount of $60,652.93, which

consisted of a $59,652.93 penalty for failure to secure workers'

compensation insurance coverage for Valou Enterprises employees

and a $1,000.00 penalty for violating the Stop-Work Order. 4

16. The compliance investigator looked to the NCCI SCOPES

Basic Manual of Classifications ("SCOPES Manual") for

classification codes attributable to the various workplace

operations of the persons working for Valou Enterprises. The

classification code assigned by the compliance investigator to

the plumbing technicians and plumbing helpers performing work

for Valou Enterprises was Code 5183. 5 According to the SCOPES

Manual and to Florida Administrative Code Rule 69L-6.021(1)(r),

Code 5183 is a code applicable to the construction industry and

covers "Plumbing NOC and Drivers." The description of the scope

of Code 5183 is stated in the SCOPES Manual in pertinent part as

follows:

Applicable to gas, steam, hot water or other

types of pipe fitting. Includes house

connections and shop operations.

* * *

Code 5183 is applicable to plumbing

operations provided that the work performed

is "not otherwise classified" (NOC).

Insureds contemplated by Code 5183 may

install, remove, or repair equipment that is

used to direct gas or water supplies to a

destination. This equipment includes but is

not limited to piping and related fixtures,

appliances, and accessories. No limits have

been established as to the size of the pipe

being repaired or installed.

The operations contemplated by Code 5183 also include "the

cleaning of building sewer connections using portable equipment"

and "the installation or service of domestic water softener

systems."

17. The approved NCCI Manual rate in Florida effective

January 1, 2006, for Code 5183 was $10.04 per $100.00 of

payroll; the approved NCCI Manual rate in Florida effective

January 1, 2007, for Code 5183 was $8.13 per $100.00 of payroll;

and the approved NCCI Manual rate in Florida effective

January 1, 2008, for Code 5183 was $6.75 per $100.00 of payroll. 6

18. The classification code found in the SCOPES Manual

assigned to Ms. Duque and to Paul Anderson, who was a clerical

worker in the Valou Enterprises office in 2006, was Code 8810.

According to the SCOPES Manual, Code 8810 covers "Clerical

Office Employees." 7 The description of the scope of Code 8810 is

stated in the SCOPES Manual in pertinent part as follows: "The

duties of a clerical office employee include . . . telephone

duties."

19. The approved NCCI Manual rate in Florida effective

January 1, 2006, for Code 8810 was $.58 per $100.00 of payroll;

the approved NCCI Manual rate in Florida effective January 1,

2007, for Code 8810 was $.48 per $100.00 of payroll; and the

approved NCCI Manual rate in Florida effective January 1, 2008,

for Code 8810 was $.37 per $100.00 of payroll. 8

20. The classification code assigned by the compliance

investigator to Kevin Mecure, a part-time employee who ran

errands for Valou Enterprises, was Code 7380. 9 According to the

SCOPES Manual, Code 7380 covers "Drivers, Chauffeurs & Their

Helpers NOC - Commercial." The description of the scope of Code

7380 is stated in the SCOPES Manual in pertinent part as

follows: "The term "drivers" refers to employees who engage in

duties on or in connection with vehicles . . . ."

21. The approved NCCI Manual rate in Florida effective

January 1, 2006, for Code 7380 was $12.20 per $100.00 of

payroll; the approved NCCI Manual rate in Florida effective

January 1, 2007, for Code 7380 was $10.18 per $100.00 of

payroll; and the approved NCCI Manual rate in Florida effective

January 1, 2008, for Code 7380 was $8.74 per $100.00 of

payroll. 10

22. The compliance investigator calculated the total

penalty attributable to Valou Enterprises's failure to provide

workers' compensation insurance coverage for the plumbing

technicians, clerical workers, and drivers using the

Department's Penalty Worksheet. She obtained the names of each

of the individuals included in her calculations and the amount

of the gross payroll for each individual from the payroll

information provided by Mr. McMillan in response to the business

records request.

23. The compliance investigator calculated the penalty as

follows: She listed Valou Enterprises's employees on the

Penalty Worksheet; assigned each employee a classification code

based on the definitions of workplace operations that most

closely described the work they performed for Valou Enterprises;

set out the dates during which Valou Enterprises did not provide

workers' compensation insurance coverage 11 ; entered the annual or

pro-rated gross payroll for each employee during the period of

non-compliance; divided the gross payroll for each employee by

100; set out the approved manual rate for each employee during

the period of non-compliance in accordance with his or her

classification code; determined the premium that Valou

Enterprises would have paid for workers' compensation insurance

coverage for each employee during the period of non-compliance

by multiplying the approved manual rate and one one-hundredth of

the gross payroll for each employee; calculated the penalty

attributable to each employee during the period of non-

compliance by multiplying the premium for each employee by 1.5;

and, finally, calculated the total penalty owed by Valou

Enterprises attributable to its failure to secure workers'

compensation insurance coverage for its employees.

CONCLUSIONS OF LAW

24. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569, 120.57(1), and

440.107(13), Florida Statutes.

25. The Department seeks to impose an administrative

penalty on Valou Enterprises for its failure to secure workers'

compensation insurance coverage for its employees. Accordingly,

the Department must prove the charges in the Stop-Work Order and

2nd Amended Order of Penalty Assessment by clear and convincing

evidence. See Department of Banking & Finance, Division of

Securities & Investor Protection v. Osbourne Stern & Co. , 670

So. 2d 932 (Fla. 1996).

26. Section 440.38(1), Florida Statutes, provides in

pertinent part that "[e]very employer shall secure the payment

of compensation under this chapter: (a) By insuring and keeping

insured the payment of such compensation with any stock company

or mutual company or association or exchange authorized to do

business in the state." The compensation and benefits required

by Chapter 440, Florida Statutes, must be paid as follows: "The

employer must pay compensation or furnish benefits required by

this chapter if the employee suffers an accidental compensable

injury or death arising out of work performed in the course and

the scope of employment. § 440.09(1), Fla. Stat.

27. The definitions pertinent to this matter are found in

Section 440.02, Florida Statutes, as follows:

(9) "Corporate officer" or "officer of a

corporation" means any person who fills an

office provided for in the corporate charter

or articles of incorporation filed with the

Division of Corporations of the Department

of State or as permitted or required by

chapter 607. . . .

* * *

(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.

(b) "Employee" includes any person who is

an officer of a corporation and who performs

services for remuneration for such

corporation within this state, whether or

not such services are continuous.

1. Any officer of a corporation may elect

to be exempt from this chapter by filing

written notice of the election with the

department as provided in s. 440.05

2. As to officers of a corporation who are

engaged in the construction industry, no

more than three officers of a corporation or

of any group of affiliated corporations may

elect to be exempt from this chapter by

filing written notice of the election with

the department as provided in s. 440.05.

* * *

(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.

28. Based on the findings of fact herein and the

definitions set out above, Valou Enterprises is an employer and

the plumbing technicians, clerical employees, and part-time

driver receiving payment for services performed for Valou

Enterprises are employees in the employment of Valou

Enterprises. Valou Enterprises is, therefore, required to

provide workers' compensation insurance coverage for its

employees. 12

29. Section 440.107, Florida Statutes, provides in

pertinent part:

(1) The Legislature finds that the failure

of an employer to comply with the workers'

compensation coverage requirements under

this chapter poses an immediate danger to

public health, safety, and welfare.

(2) For the purposes of this section,

"securing the payment of workers'

compensation" means obtaining coverage that

meets the requirements of this chapter and

the Florida Insurance Code. . . .

(3) The department shall enforce workers'

compensation coverage requirements,

including the requirement that the employer

secure the payment of workers' compensation,

and the requirement that the employer

provide the carrier with information to

accurately determine payroll and correctly

assign classification codes. In addition to

any other powers under this chapter, the

department shall have the power to:

(a) Conduct investigations for the purpose

of ensuring employer compliance.

(b) Enter and inspect any place of business

at any reasonable time for the purpose of

investigating employer compliance.

(c) Examine and copy business records.

(d) Administer oaths and affirmations.

(e) Certify to official acts.

(f) Issue and serve subpoenas for

attendance of witnesses or production of

business records, books, papers,

correspondence, memoranda, and other

records.

(g) Issue stop-work orders, penalty

assessment orders, and any other orders

necessary for the administration of this

section.

(h) Enforce the terms of a stop-work order.

(i) Levy and pursue actions to recover

penalties.

(j) Seek injunctions and other appropriate

relief.

* * *

(7)(a) Whenever the department determines

that an employer who is required to secure

the payment to his or her employees of the

compensation provided for by this chapter

has failed to secure the payment of workers'

compensation required by this chapter or to

produce the required business records under

subsection (5) within 5 business days after

receipt of the written request of the

department, such failure shall be deemed an

immediate serious danger to public health,

safety, or welfare sufficient to justify

service by the department of a stop-work

order on the employer, requiring the

cessation of all business operations. If

the department makes such a determination,

the department shall issue a stop-work order

within 72 hours. The order shall take

effect when served upon the employer or, for

a particular employer worksite, when served

at that worksite. In addition to serving a

stop-work order at a particular worksite

which shall be effective immediately, the

department shall immediately proceed with

service upon the employer which shall be

effective upon all employer worksites in the

state for which the employer is not in

compliance. A stop-work order . . . shall

remain in effect until the department issues

an order releasing the stop-work order upon

a finding that the employer has come into

compliance with the coverage requirements of

this chapter and has paid any penalty

assessed under this section. The department

may issue an order of conditional release

from a stop-work order to an employer upon a

finding that the employer has complied with

coverage requirements of this chapter and

has agreed to remit periodic payments of the

penalty pursuant to a payment agreement

schedule with the department. . . .

(b) Stop-work orders and penalty assessment

orders issued under this section against a

corporation, partnership, or sole

proprietorship shall be in effect against

any successor corporation or business entity

that has one or more of the same principals

or officers as the corporation or

partnership against which the stop-work

order was issued and are engaged in the same

or equivalent trade or activity.

(c) The department shall assess a penalty

of $1,000 per day against an employer for

each day that the employer conducts business

operations that are in violation of a stop-

work order.

(d)1. In addition to any penalty, stop-work

order, or injunction, the department shall

assess against any employer who has failed

to secure the payment of compensation as

required by this chapter a penalty equal to

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

required by this chapter within the

preceding 3-year period or $1,000, whichever

is greater.

30. Based on the findings of fact herein, the penalty for

Valou Enterprises's failure to secure workers' compensation

insurance coverage for its employees, as set out on the Penalty

Worksheet attached to the 2nd Amended Order of Penalty

Assessment, was calculated in conformance with the requirements

of Section 440.107(7)(d)1., Florida Statutes, on the form

required by Florida Administrative Code Rule 69L-6.027. The

Department has, therefore, proven by clear and convincing

evidence that Valou Enterprises was properly assessed $59,652.93

as the penalty for its failure to secure workers' compensation

insurance coverage for its employees.

31. The Department has failed, however, to prove by clear

and convincing evidence that Valou Enterprises violated the

Stop-Work Order. Mr. Dassell was not working on July 3, 2008.

Under the procedures in place at Mr. Rooter, a plumbing

technician was only paid for work done on a job assigned by

Mr. Rooter and was on call whenever he was not working on an

assigned job. Mr. Dassell had not been dispatched on a job for

Mr. Rooter on July 3, 2008, because the office was closed. The

fact that Mr. Dassell had not been advised that the business was

closed on July 3, 2008, and that he considered himself on-call

is not sufficient to establish that he was performing services

for Mr. Rooter in violation of the Stop-Work Order. The

Department has, therefore, failed to prove that a penalty should

be imposed against Valou Enterprises for a violation of the

Stop-Work Order. The total penalty assessed against Valou

Enterprises in the 2nd Amended Order of Penalty Assessment

should be reduced from $60,652.93 to $59,652.93.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Financial Services

enter a final order finding that Valou Enterprises, Inc., d/b/a/

Mr. Rooter Plumbing, failed to secure workers' compensation

insurance coverage for its employees in violation of

Section 440.38(1), Florida Statutes, and imposing a penalty in

the amount of $59,652.93 for the failure to provide the required

workers' compensation insurance coverage.

DONE AND ENTERED this 28th day of April, 2009, in

Tallahassee, Leon County, Florida.

___________________________________

PATRICIA M. HART

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 28th day of April, 2009.

ENDNOTES

1 / All references herein to the Florida Statutes are to the 2008

edition unless indicated otherwise.

2 / Respondent's Exhibit 3.

3 / Petitioner's Exhibit 5 at page 93.

4 / Petitioner's Exhibit 9.

5 / Petitioner's Exhibit 10.

6 / Petitioner's Exhibit 11.

7 / Petitioner's Exhibit 10.

8 / Petitioner's Exhibit 11.

9 / Petitioner's Exhibit 10.

10 / Petitioner's Exhibit 11.

11 / It is noted that, although Mr. Rooter was found to be non-

compliant with Florida's Workers' Compensation Law on July 2,

2005, the penalty calculations in both the Amended Order of

Penalty Assessment and the 2nd Amended Order of Penalty

Assessment began effective January 1, 2006, and extended through

July 2, 2008.

12 / Mr. McMillan and Mr. Rolle are not considered employees of

Mr. Rooter because they are corporate officers who have chosen

to be exempt from the requirements of Chapter 440, Florida

Statutes, as permitted by Section 440.05(3), Florida Statutes

("Each officer of a corporation who is engaged in the

construction industry and who elects an exemption from this

chapter . . . must mail a written notice to such effect to the

department on a form prescribed by the department.")

COPIES FURNISHED:

Kristian E. Dunn, Esquire

Department of Financial Services

Division of Workers' Compensation

200 East Gaines Street

Tallahassee, Florida 32399-4229

Leslie McMillian

Valou Enterprises, Inc.

15980 Southwest 109 Street

Miami, Florida 33196

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 32399-0300

Tracey Beal, Agency Clerk

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399-0390

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.