09-006594 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Nobel Van Lines, Inc. Status: Closed Recommended Order on Tuesday, April 20, 2010.

Summary: Petitioner properly issued a Stop-Work Order and Second Amended Penalty Assessment against Respondent for failing to obtain workers' compensation insurance that meets the requirements of Chapter 440, Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, DIVISION OF WORKERS' )

COMPENSATION, )

)

Petitioner, )

)

vs. ) Case No. 09-6594

)

NOBEL VAN LINES, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case on

March 5, 2010, by video teleconference at sites in Miami and

Tallahassee, Florida, before Administrative Law Judge June C.

McKinney of the Division of Administrative Hearings, pursuant to

the authority set forth in Sections 120.569 and 120.57(1),

Florida Statutes.

APPEARANCES

For Petitioner: Douglas D. Dolan, Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399-0333

For Respondent: Yaniv Dalei, pro se

18255 Northeast 4th Court, Section A

North Miami Beach, Florida 33162

STATEMENT OF THE ISSUE

The issue is whether Petitioner properly issued a Stop Work

Order (SWO) and Second Amended Penalty Assessment against

Respondent for failing to obtain workers' compensation insurance

that meets the requirements of Chapter 440, Florida Statutes.

PRELIMINARY STATEMENT

On June 9, 2009, and June 12, 2009, the Division of

Workers' Compensation ("Division" or "Petitioner") issued and

served a SWO and Order of Penalty Assessment ("Order") on Nobel

Van Lines, Inc. ("Nobel" or "Respondent"), alleging that

Respondent was not in compliance with the coverage requirements

of Chapter 440, Florida Statutes, and the Florida Insurance

Code. Respondent was ordered to cease all business operations.

On August 3, 2009, Petitioner received a Petition from

Respondent challenging the Amended Order of Penalty Assessment

and requesting a hearing on the matter. The Petition was

transferred to the Division of Administrative Hearings on

December 1, 2009, for assignment of an Administrative Law Judge

to conduct the hearing.

On March 3, 2010, Petitioner filed a Motion to Amend Order

of Penalty Assessment, and, upon the granting of the Motion,

issued and served its Second Amended Order of Penalty Assessment

in the amount of $68,224.81. Respondent's Petition has been

applied to the subsequent Second Amended Order of Penalty

Assessment so that the final hearing would consider the most

recently filed order of assessment.

At hearing, Petitioner testified on his own behalf.

Petitioner's Exhibit A was received into evidence. The Division

presented the testimony of Russell Gray and Cesar Tolentino.

The Division's Exhibits A through Q and S were received into

evidence.

At the request of the Division, the undersigned took

official recognition of Chapter 440, Florida Statutes and 69L-6,

Florida Administrative Code.

The proceedings were transcribed and the parties availed

themselves of the right to submit proposed recommended orders

after the filing of the Transcript. The Transcript of the final

hearing was filed with the Division of Administrative Hearings

on March 26, 2010. Petitioner and Respondent timely filed

Proposed Recommended Orders which have been considered in the

preparation of this Recommended Order.

All citations are to Florida Statutes (2009) unless

otherwise indicated.

FINDINGS OF FACT

1. The Division is a component of the Department of

Financial Services. It is responsible for enforcing the

workers' compensation coverage requirements pursuant to Section

440.107, Florida Statutes.

2. Nobel is a corporation operating as a moving business

in Florida. Nobel was incorporated in 2004 and has been

operating with an active status since its inception. Yaniv

Dalei is the sole owner and president of Nobel.

3. On June 9, 2009, Petitioner's investigator, Cesar

Tolentino, visited 18255 Northeast 4th Court, North Miami,

Florida ("business site"), after being referred to the location

to investigate Respondent for compliance with the Florida

Workers' Compensation Law.

4. At the business site, Petitioner's investigator spoke

to the manager, and saw the bookkeeper and the receptionist

during the visit.

5. Respondent was not at the business site, but was out of

the country in Panama when Tolentino visited. Respondent spoke

to Tolentino by telephone. Respondent informed Tolentino that

he had five employees and that he "was in the process of

obtaining workers' compensation insurance."

6. While at the business site, Tolentino, used the

Department of Financial Services' Coverage and Compliance

Automated System (CCAS), and confirmed Respondent lacked

insurance for the payment of workers' compensation coverage.

Additionally, Petitioner's investigator verified through the

CCAS that Nobel had not secured an employee leasing company to

secure workers' compensation insurance for its employees as well

as found that no exemptions from workers' compensation had been

issued in connection with Nobel.

7. Petitioner's investigator also performed a National

Council on Compensation Insurance search on Nobel while at the

business site. The search revealed that Nobel's employees had

not had workers' compensation insurance in the past.

8. On June 9, 2009, Petitioner's investigator issued a SWO

and posted it at the business site. The SWO required Respondent

to cease all business operations.

9. On June 10, 2009, Respondent obtained a certificate of

insurance for workers' compensation coverage with the effective

date being the same. The policy was issued by One-Stop

Insurance Agency. Respondent provided the certificate to

Tolentino upon receipt.

10. On June 12, 2009, Petitioner's investigator issued to

Respondent a Division of Workers' Compensation Request for

Production of Business Records for Penalty Assessment

Calculation ("Request").

11. Soon thereafter, Respondent responded to the Request

and provided Petitioner's investigator with the requested

records. Petitioner's investigator forwarded the documents to

Jorge Pinera, Petitioner's penalty calculator, for review.

12. On or about July 17, 2009, Petitioner issued an

Amended Order of Penalty Assessment assessing a penalty of

$74,794.38 against Respondent.

13. On August 10, 2009, Respondent entered into a payment

agreement with the Division. Respondent provided the Division a

$7,480.00 cashier's check and agreed to pay the remainder of the

assessed penalty in monthly installments. As a result,

Petitioner issued an Order of Conditional Release for Nobel to

operate.

14. On March 3, 2010, Respondent supplied an employee list

with position descriptions to Petitioner. After reviewing the

document, Petitioner changed some employee class codes to

indicate a lower rate for some occupations and recalculated the

penalty amount owed with the new class codes.

15. For the recalculation, Petitioner's penalty

calculator, Russell Gray, used the following calculation from

the penalty worksheet: (a) Respondent's total gross payroll from

June 10, 2006, through June 9, 2009, was $1,010,001.32; (b) the

total workers' compensation premium that Respondent should have

paid for its employees during the relevant time period was

$45,483.96; and (c) the premium was multiplied by the statutory

factor of 1.5 resulting in a penalty assessment in the amount of

$68,224.81.

16. The new calculation superseded the Amended Order and a

Second Amended Order of Penalty Assessment was issued March 3,

2010, reducing Respondent's penalty to $68,224.81. 1

17. During the hearing, Respondent admitted not having

workers' compensation coverage for his employees. He said,

"Yes, you're right I needed to have workers' compensation but as

I said . . . I never knew that I needed to have workers'

compensation . . . I'm here to ask for forgiveness."

CONCLUSIONS OF LAW

18. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

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

Florida Statutes.

19. Chapter 440, Florida Statutes, is known as the

"Workers' Compensation Law." See § 440.01, Fla. Stat.

20. Employers are required to secure payment of

compensation for their employees. §§ 440.10(1)(a) and

440.38(1), Fla. Stat.

21. "Employer" is defined, in part, as "every person

carrying on any employment." § 440.02 (16), Fla. Stat.

"Employment . . . means any service performed by an employee for

the person employing him or her" and includes "[a]ll private

employments in which four or more employees are employed by the

22. "Employee" is defined, in part, as "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. . . ." § 440.02(15)(a), Fla. Stat.

23. Because an administrative fine deprives the person

fined of substantial rights in property, such fines are punitive

in nature. Petitioner has the burden of proof and must

establish through clear and convincing evidence that Respondent

violated the workers' compensation law. Department of Banking

and Finance, Division of Securities and Investor Protection v.

Osborne Stern, Inc. , 670 So. 2d 932 (Fla. 1996).

24. Under Section 440.107(2), Florida Statutes, "'securing

the payment of workers' compensation' means obtaining coverage

that meets the requirements of this chapter and the Florida

Insurance Code."

25. Petitioner established by clear and convincing

evidence that Nobel was an "employer" for workers' compensation

purposes because it was engaged in a moving business and had

four or more employees working for the corporation from June

2006 through June 2009. Nobel was therefore required to secure

the payment of workers' compensation.

26. Section 440.107(7)(a), Florida Statutes, provides in

relevant part:

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 . . . 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.

Thus, the Division's SWO was mandated by statute.

27. Section 440.107(7)(d), Florida Statutes, states as

follows:

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.

28. Florida law does not provide for consideration of

mitigating circumstances in cases where an employer fails to

secure workers' compensation insurance because the employer

isn't aware that it is required.

29. Based on Respondent's business records, Respondent's

total payroll from June 10, 2006, through June 9, 2009, was

$1,010,001.32. The total workers' compensation premium that

Respondent should have paid for its employees during the

relevant time period was $45,483.96. Multiplying that amount by

the statutory factor of 1.5 results in a penalty assessment in

the amount of $68,224.81.

30. Petitioner correctly issued the SWO and Second Amended

Penalty Assessment prescribed in Section 440.107(7)(d), Florida

Statutes. The evidence here clearly indicates that Respondent

owes $68,224.81 as a penalty for not "securing the payment of

workers' compensation."

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, issue a final order affirming

the Stop Work Order and Second Amended Order of Penalty

Assessment in the amount of $68,224.81.

DONE AND ENTERED this 20th day of April, 2010, in

Tallahassee, Leon County, Florida.

S

JUNE C. McKINNEY

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 April, 2010.

ENDNOTE

1 / Respondent testified and demonstrated to the undersigned that

he contacted Tolentino numerous times to try to obtain the

penalty amount so that Nobel could reopen but the Division took

two months to calculate the first penalty. The two month time

line is contrary to the Division recalculating the penalty

amount all in one day, March 3, 2010.

COPIES FURNISHED :

Yaniv Dalei

Nobel Van Lines, Inc.

230 191 Street

Sunny Isles Beach, Florida 33160

Yaniv Dalei

Nobel Van Lines, Inc.

18255 Northeast 4th Court, Section A

North Miami Beach, Florida 33162

Douglas D. Dolan, Esquire

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399-0333

Julie Jones, CP, FRP, Agency Clerk

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399-0390

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0300

Benjamin Diamond, 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 Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.