09-006215 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Rivera Construction Of North Florida, Llc Status: Closed Recommended Order on Friday, March 19, 2010.

Summary: Petitioner presented clear and convincing evidence that Respondent failed to secure the payment of workers' compensation as required by Chapter 440, Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL )

SERVICES, DIVISION OF WORKERS’ )

COMPENSATION, )

)

Petitioner, )

)

vs. ) Case No. 09-6215

)

RIVERA CONSTRUCTION OF NORTH )

FLORIDA, LLC, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was conducted in this case on February 22,

2010, in Tallahassee, Florida, before Suzanne F. Hood,

Administrative Law Judge with the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Paige Billings Shoemaker, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399-4229

For Respondent: Salvador Rivera, pro se

Rivera Construction

of North Florida, LLC

931 Rosemary Terrace

Tallahassee, Florida 32303

STATEMENT OF THE ISSUES

The issues are whether Respondent failed to secure the

payment of workers' compensation insurance, and if so, what

penalty should be imposed.

PRELIMINARY STATEMENT

On or about September 25, 2009, Petitioner Department of

Financial Services, Division of Workers' Compensation

(Petitioner), issued a Stop-work Order and an Order of Penalty

Assessment against Respondent Rivera Construction of North

Florida, LLC (Respondent). The order alleged that Respondent

had failed to secure workers' compensation insurance as required

by Chapter 440, Florida Statutes (2009).

On October 6, 2009, Petitioner issued an Amended Order of

Penalty Assessment. The order alleged that Respondent owed a

penalty in the amount of $3,566.37 for failing to obtain

workers' compensation insurance.

On or about October 20, 2009, Respondent filed a Request

for Administrative Review of Agency Action. Petitioner referred

the request to the Division of Administrative Hearings on

November 12, 2009.

On November 25, 2009, the undersigned issued a Notice of

Hearing. The notice scheduled the hearing for February 5, 2010.

When the hearing commenced as scheduled, Respondent did not

make an appearance. In a telephone conference call during the

hearing, the parties agreed to reschedule the hearing for

February 22, 2010.

On February 8, 2010, the undersigned issued an Order

Granting Continuance and Re-scheduling Hearing for February 22,

2010.

When the hearing reconvened, Petitioner presented the

testimony of one witness. Petitioner offered nine exhibits that

were accepted as evidence.

Respondent testified on his own behalf and presented the

testimony of one additional witness. Respondent offered one

exhibit that was accepted as evidence.

The Transcript of the proceeding was filed on March 8,

2010.

Petitioner filed a Proposed Recommended Order on March 17,

2010. As of the date that this Recommended Order was issued,

Respondent had not filed proposed findings of fact and

conclusions of law.

All references hereinafter shall be to Florida Statutes

(2009), unless otherwise indicated.

FINDINGS OF FACT

1. Petitioner is the agency charged with enforcing the

provisions of Chapter 440, Florida Statutes.

2. Respondent is a Florida limited-liability company,

organized in 2004. Salvador Rivera is one of the company's

managers/officers.

3. On or about February 27, 2009, Respondent secured

workers' compensation insurance for its employees. The carrier

was Guarantee Insurance Co.

4. In a Notice of Termination of Workers' Compensation

Insurance dated August 10, 2009, Guarantee Insurance Co. advised

Petitioner and Respondent that Respondent's workers'

compensation insurance would be cancelled on August 25, 2009.

Guarantee Insurance Co. issued the notice because Respondent had

not paid its insurance premium.

5. Some time after receiving the notice from its insurer,

Respondent received a check from Brantley Custom Homes.

Mr. Rivera deposited the check into Respondent's bank account.

Mr. Rivera then wrote a check to Guarantee Insurance Co. for the

workers' compensation insurance premium.

6. Mark Piazza is one of Petitioner's compliance

investigators. On September 25, 2009, Mr. Piazza conducted a

routine compliance check in the Southwood subdivision of

Tallahassee, Florida.

7. During the compliance check, Mr. Piazza noticed a new

home under construction. He saw two men, Gilberto Torres and

Saturino Gonzalez, doing carpentry work at the building site.

Under the Scopes Manual, carpentry is identified as construction

work under the class code 5645.

8. During an interview with the two men, Mr. Piazza

learned that they were employed by Respondent. Mr. Rivera

confirmed by telephone that Respondent employed the two men.

9. Mr. Rivera believed that Respondent had workers'

compensation coverage on September 25, 2009. Mr. Rivera was not

aware that the check from Brantley Custom Homes had bounced,

resulting in insufficient funds for Respondent's bank to pay

Respondent's check to Guarantee Insurance Co.

10. Mr. Piazza then contacted Respondent's local insurance

agent and checked Petitioner's Coverage and Compliance Automated

System (CCAS) database to verify Mr. Rivera's claim that

Respondent had workers' compensation insurance. Mr. Piazza

subsequently correctly concluded that Respondent's insurance

policy had been cancelled on August 25, 2009, due to the failure

to pay the premium.

11. On September 25, 2009, Mr. Piazza served Respondent

with a Stop-work Order and Order of Penalty Assessment. The

penalty assessment was 1.5 times the amount of the insurance

premium that Respondent should have paid from August 25, 2009,

to September 24, 2009.

12. After receiving the Stop-work Order on September 25,

2009, Brantley Custom Homes gave Respondent another check.

Mr. Rivera then sent Guarantee Insurance Co. a second check to

cover the premium with the understanding that there would be no

lapse in coverage.

13. On September 28, 2009, Guarantee Insurance Co.

provided Respondent with a notice of Reinstatement or Withdrawal

of Policy Termination. The notice states as follows:

Our Notice of Termination, filed with the

insured and the Department of Labor and

Employment Security effective 8/25/2009 and

or dated 8/10/2009, is hereby voided and

coverage remains in effect for the employer

identified below.

14. There is no evidence to show whether Respondent had to

sign a no-loss affidavit and submit it to Guarantee Insurance

Co. before the insurer would reinstate the policy with no lapse.

Such an affidavit usually states that the insured had no claims

during the uninsured period,

15. On September 29, 2009, Mr. Piazza served a second copy

of the Stop-work Order and Order of Penalty Assessment on

Respondent. At that time, Mr. Piazza also served Respondent

with a Request for Production of Business Records for Penalty

Assessment Calculation. Respondent subsequently provided

Petitioner with the records.

16. On October 6, 2009, Mr. Piazza served Respondent with

an Amended Order of Penalty Assessment. The assessed penalty

was $3,566.27.

17. The assessed penalty was based on Respondent's

business records showing the following: (a) Respondent's total

payroll from August 25, 2009, through September 24, 2009, was

$15,280.00; (b) the total workers' compensation premium that

Respondent should have paid for its employees during the

relevant time period was $2,377.56; and (c) multiplying

$2,377.56 by the statutory factor of 1.5 results in a penalty

assessment in the amount of $3,566.37.

18. On October 6, 2009, Petitioner and Respondent entered

into a Payment Agreement Schedule for Periodic Payment of

Penalty. Respondent gave Petitioner $1,000 as a down payment on

the assessed penalty. The balance of the penalty is to be paid

in 60 monthly payments in the amount of $42.77 per month, with

the exception of the last payment in the amount of $42.64 on

November 1, 2014.

19. On October 6, 2009, Petitioner issued an Order of

Conditional Release from Stop-work Order. The conditional

release states that it will be in place until Respondent pays

the assessed penalty in full.

CONCLUSIONS OF LAW

20. DOAH has jurisdiction over the parties and the subject

matter of this proceeding pursuant to Sections 120.569 and

120.57(1), Florida Statutes.

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

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

22. Petitioner has the burden of proving by clear and

convincing evidence that Respondent violated the Workers’

Compensation Law during the relevant period and that the penalty

assessments are correct. See Department of Banking and Finance

Division of Securities and Investor Protection v. Osborne Stern

and Co. , 670 So. 2d 932 (Fla. 1996).

23. Pursuant to Sections 440.10 and 440.38, Florida

Statutes, every “employer” is required to secure the payment of

workers’ compensation insurance for the benefit of its employees

unless exempted or excluded under Chapter 440, Florida Statutes.

In this case, there were no applicable exemptions or exclusions.

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

follows:

(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 the 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 of $1,000, whichever

is greater.

26. Florida law does not provide for mitigating

circumstances in cases where an employer fails to secure

workers' compensation insurance. If an "employer comes into

compliance with the workers' compensation coverage requirements

prior to the issuance of a stop work order, such employer shall

be assessed a penalty pursuant to Section 440.107(7)(d)1., F.S.,

and a stop work order will not be issued for such violation."

See Fla. Admin. Code R. 69L-6.030.

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

total payroll from August 25, 2009, through September 24, 2009,

was $15,280.00. The total workers' compensation premium that

Respondent should have paid for its employees during the

relevant time period was $2,377.56. Multiplying that amount by

the statutory factor of 1.5 results in a penalty assessment in

the amount of $3,566.37.

28. Petitioner correctly issued the Stop-work Order and

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

Florida Statutes. The evidence here clearly indicates that

Respondent owes $3,566.37 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 Amended Order of Penalty Assessment in the amount

of $3,566.37.

DONE AND ENTERED this 19th day of March, 2010, in

Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 19th day of March, 2010.

COPIES FURNISHED :

Salvador Rivera

Rivera Construction of North Florida, LLC

931 Rosemary Terrace

Tallahassee, Florida 32303

Paige Billings Shoemaker, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

Julie Jones, CP, FRP, Agency Clerk

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32399

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399

Benjamin Diamond, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399

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.