13-004577 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Michael Cribbs, D/B/A Michael Cribbs Construction Of Pensacola, Inc., A Dissolved Florida Corporation, And Michael Cribbs Construction Of Pensacola, Inc. Status: Closed Recommended Order on Friday, August 22, 2014.

Summary: Imputation of wages not appropriate in absence of competent evidence that worker at site was given remuneration so as to be an employee; otherwise violation of workers' compensation law was proved, and reduced penalty was recommended.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No. 13 - 4577

MICHAEL CRIBBS, d/b/a MICHAEL

CRIBBS CONSTRUCTION OF

PENSACOLA, INC., A DISSOLVED

FLORIDA CORPORATION, AND MICHAEL

CRIBBS CONSTRUCTION OF

PENSACOLA, INC.,

Respondents.

_______________________________/

RECOMMENDED ORDER

On July 2, 2014, a duly - noticed hearing was held by video

teleconference at locations in Pensacola and Tallaha ssee,

Florida, before F. Scott Boyd, an Administrative Law Judge

assigned by the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Alexander Brick, Esquire

Department of Financial Services

200 East Gaine s Street

Tallahassee, Florida 32399

For Respondents: Michael James Rudicell, Esquire

Michael J. Rudicell, P.A.

4309 B Spanish Trail

Pensacola, Florida 32504

STATEMENT OF THE ISSUE S

The issues in this case are whether Respondents violated the

provisions of chapter 440, Florida Statutes (2013), 1/ by failing

to secure the payment of workersÓ compensation as alleged in the

Stop - Work Order and Second Amended Order of Penalty Assessment,

and, if so, what penalty is appropriate.

PRELIMINARY STATEMENT

Following a site inspection, Petitioner issued a Stop - Work

Order, Order of Penalty Assessment, and Request for Production of

Business Records for Penalty Assessment Calculation to

Respondents on July 25, 2013, by hand delivery at the worksite.

Respondents provided some records in response to the Request for

Production of Business Records. The matter was referred to the

Division of Administrative Hearings for assignment of an

Administrative La w Judge on November 21, 2013. An Amended Order

of Penalty Assessment was filed on November 21, 2013.

The final hearing was conducted on July 2, 2014. Following

motion, leave was granted to amend the Amended Order of Penalty

Assessment to reduce the asser ted penalty, based in part on

information contained in supplied records. The parties offered

21 exhibits, J - 1 through J - 21, which were admitted with the

express caveat that hearsay contained within them was not

sufficient in itself to support findings of fact, but could be

used only to supplement or explain other evidence. Petitioner

presented the testimony of two witnesses: Ms. Angelia Brown,

compliance investigator, and Mr. Phil Sley, penalty auditor.

Respondents offered the testimony of Mr. Michael C ribbs.

The one - volume Transcript was filed with the Division of

Administrative Hearings on July 15, 2014. An Agreed Motion for

Extension of Time for Submission of Proposed Recommended Orders

was granted on July 25, 2014. The parties timely filed proposed

recommended orders on August 4, 2014, which were carefully

considered.

FINDING S OF FACT

1. Petitioner, Department of Financial Services, Division

of WorkersÓ Compensation (the Department), is the state agency

responsible for enforcing the statutory requi rement that

employers secure the payment of workersÓ compensation for the

benefit of their employees and corporate officers.

2. Ms. Angelia Brown has been a compliance investigator

with the Department since 2007. On July 25, 2013, Investigator

Brown cond ucted a site visit to a residential structure at

606 Orby Street, Pensacola, Florida. She observed three men

performing roofing work on a detached two - car garage. One of the

men showed her a job ÐticketÑ indicating he was a ÐleasedÑ

laborer from Action L abor, an employee leasing company

specializing in daily labor. Neither of the other men showed her

tickets.

3. Investigator Brown said that Mr. Robert Reed told her he

was working for Mr. Michael Cribbs and that he had been on the

site for a couple of days, but did not have a job ticket from

Action Labor at that time. She testified that Mr. James Kingry

told her he had not discussed pay with Mr. Cribbs, but that he

did expect to be paid.

4. Investigator Brown examined the information on the

permit boa rd at the job site and determined that a permit had

been issued to Michael Cribbs Construction of Pensacola, Inc.,

and that the permit was active.

5. Based upon the information provided by the three men,

Investigator Brown checked workersÓ compensation in formation by

accessing the Coverage and Compliance Automated System (CCAS)

maintained by the Department. The database indicated no workersÓ

compensation coverage in effect for Mr. Cribbs or for Michael

Cribbs Construction of Pensacola, Inc. CCAS further showed that

Mr. Cribbs, as president of Michael Cribbs Construction of

Pensacola, Inc., had an exemption on file, but that this

exemption had lapsed from March 8 , 2012, through July 1 5 , 2012.

6. Investigator Brown called Action Labor and was informed

that only Mr. Louis Sampson was Ðon ticketÑ for the day; that

there was no active or current ticket for Mr. Reed, although he

had been on ticket in the past; and that there were no records at

all on Mr. Kingry. There was clear and convincing evidence that

Res pondents had periodically ÐleasedÑ employees from Action

Labor, including evidence that Mr. Sampson was employed by Action

Labor and was working at the Orby Street site on July 25, 2013.

7. Investigator Brown next contacted Mr. Cribbs. She told

him tha t she was at the Orby Street site and explained the reason

she was there. Mr. Cribbs told her that Mr. Sampson and Mr. Reed

were ÐcoveredÑ and that Mr. Kingry was his former business

partner of 20 years and was not being paid. Investigator Brown

told Mr. Cribbs that Mr. Reed was not on an Action Labor ticket.

Mr. Cribbs replied that he had a ticket for Mr. Reed and that he

would look for it.

8. Investigator Brown accessed the Department of State,

Division of CorporationsÓ website. That database indica ted that

Michael Cribbs Construction of Pensacola, Inc., was inactive, and

that it had been dissolved on September 28, 2012, for failure to

file an annual report.

9. Based upon her investigation, Investigator Brown

concluded that Mr. Reed and Mr. Kingry were employees of Michael

Cribbs, d/b/a Michael Cribbs Construction of Pensacola, Inc., a

dissolved Florida corporation, and were not covered by workersÓ

compensation. She contacted her supervisor.

10. Respondents received a Stop - Work Order and Order of

Penalty Assessment from the Department on July 25, 2013.

11. Respondents received a Request for Production of

Business Records for Penalty Assessment Calculation from the

Department on July 25, 2013. It requested records for the three -

year period from J uly 26, 2010, through July 25, 2013.

12. In response to the Request for Production of Business

Records, Mr. Cribbs provided some records to the DepartmentÓs

Pensacola Office. He did not provide business records sufficient

to enable the Department to dete rmine payroll for the calculation

of a penalty, however. There was clear and convincing evidence

that Mr. Cribbs had operated in the construction industry as a

corporate officer of Michael Cribbs Construction of Pensacola,

Inc.

13. Mr. Phillip Sley is a penalty calculator employed by

the Department. He reviewed the business records that had been

provided by Respondents, including insurance policies, bank

statements, exemption documents, and some payroll documents, and

calculated a penalty.

14. Respond ents received an Amended Order of Penalty

Assessment from the Department on August 6, 2013. It assessed a

penalty for failure to secure workersÓ compensation coverage

based upon imputed wages for Mr. Reed and Mr. Kingry for almost

all of the three - year pe riod and imputed wages for Mr. Cribbs for

the period of March 8, 2012, through July 15, 2012, when his

exemption had lapsed.

15. Mr. Cribbs subsequently provided some additional

documents, including tax returns and bank images, but these were

still insuff icient to fully determine the payroll. Mr. Sley re -

calculated a penalty based in part upon documents that were

provided and in part on imputed information.

16. Records provided by Respondents indicate that Michael

Cribbs Construction of Pensacola, Inc., was an employer for

periods from July 26, 2010, until its dissolution on

September 28, 2012. Mr. Cribbs, as a sole proprietor, was an

employer from September 29, 2012, until the site visit on

July 25, 2013.

17. The assessed penalty amount was reduced fo r Mr. Reed

and Mr. Kingry, but additional penalties were assessed for six

other individuals, based upon payments to them on various dates

from September 2, 2010, through December 31, 2012. There was

clear and convincing evidence at hearing that these six

individuals were employees of Michael Cribbs Construction of

Pensacola, Inc., and Mr. Cribbs. The new assessment represented

a net reduction in the overall penalty.

18. Respondents requested an administrative hearing, which

was conducted on July 2, 2014. A motion to adopt the Second

Amended Order of Penalty Assessment, consistent with the

DepartmentÓs latest calculations, was granted.

19. At hearing, Mr. Cribbs testified that the owners of the

house at the Orby Street site had been paying a framing cre w, but

when he checked on them they had framed the garage roof

incorrectly, so he fired them.

20. The framing work being done on the detached garage at

the Orby Street site was for - profit activity involving building

and substantial improvement in the si ze and use of the

residential structures at that location. There was clear and

convincing evidence that the work was activity within the

construction industry.

21. Mr. Cribbs testified that , after firing the framing

crew, he asked Mr. Reed to come to the job because he had worked

with Mr. Reed before through Action Labor and that Mr. Reed

Ðseemed to know what he was doing.Ñ He testified that he told

Mr. Reed to call in to Action Labor. He also testified that he

had a ticket for Mr. Reed and that he cons idered Mr. Reed to be

an employee of Action Labor. He acknowledged that Mr. Reed

failed to call in to Action Labor. Mr. Reed was an employee of

Respondent s , as defined in section 440.02, Florida Statutes, on

July 25, 2013.

22. Mr. Cribbs testified tha t Mr. Kingry was a good friend

he had known since they met in 1979 while doing framing work. He

testified that they had been partners through the years, that

their wives were best friends, and that they fished together. He

said that he had used Mr. Kingr y -- who earlier had his own company

and exemption -- as a subcontractor on a few jobs when construction

was booming after hurricane Ivan in 2004. He testified that they

had not worked together at all since that time.

23. Mr. Cribbs testified that his moth er had been in and

out of the emergency room and hospital with lung and brain

cancer. He said he called Mr. Kingry from the hospital and asked

him to go by the Orby Street job just to make sure that Mr. Reed

knew what he was doing in cutting in the roof. He said he wasnÓt

expecting Mr. Kingry to do any work because he knew that Mr.

Kingry had an injured knee, and only expected him to be at the

site for Ðmaybe 30 minutes.Ñ Mr. Cribbs testified that there was

no expectation that Mr. Kingry was going to be paid for going out

there and that Mr. Kingry never asked him about pay.

24. Mr. Kingry was engaged in construction activity on the

roof on July 25, 2013. There was insufficient evidence at

hearing to refute Mr. Cribb s Ós testimony or otherwise demonstrate

that Mr. Kingry was paid for his work, however. There was

insufficient evidence to show that Mr. Kingry had been an

employee of Mr. Cribbs or Michael Cribbs Construction of

Pensacola, Inc. , on July 25, 2013, or at any time during the

preceding three year s.

25. Mr. Cribbs further testified at hearing that he had

maintained all of the records he was required to have, but that

most of them had been destroyed. He testified that , when he was

married, he had kept the records in his house, but that , after he

w as divorced, he moved into a rental property and kept the

records in some filing cabinets in a shed out back. Mr. Cribbs

testified that about two years ago someone broke the lock on the

shed, stole the filing cabinets, and left the papers strewn on

the di rt floor of the shed. Mr. Cribbs said that shortly

afterwards it rained heavily and flooded. He said that none of

the records could be salvaged. This would have been about

July 2012, near the time when Mr. Cribbs renewed his expired

exemption. Mr. Crib bs admitted that he did not file a police

report on the stolen file cabinets.

26. Mr. Cribbs said he went to his bank to get copies of

some records, but that , for portions of the three - year period , he

did not have a bank account.

27. Investigator Brown t estified that she had checked job

sites of Mr. Cribbs or Michael Cribbs Construction of Pensacola,

Inc., on two earlier occasions and that no violations were found.

The first time, it was determined that workers at the site were

being paid directly by the homeowners and that Mr. CribbsÓ s

exemption was in place, so everything was in compliance. The

second time, the D epartment received a complaint. There was an

active permit, but , at the time of the site visit, all work had

been completed.

28. Respondents were engaged in construction industry

business operations in the s tate of Florida during the periods of

September 2, 2010, through December 31, 2010, and August 17,

2012, through December 31, 2012.

29. Mr. Cribbs was engaged in construction industry

busi ness operations at the Orby Street site on July 25, 2013.

30. Mr. Reed was an ÐemployeeÑ of Mr. Cribbs, as defined in

section 440.02 , on July 25, 2013.

31. Respondents did not secure the payment of workersÓ

compensation insurance coverage for Mr. Reed on July 25, 2013.

32. Neither Mr. Reed nor Mr. Kingry held valid workersÓ

compensation exemptions during the period of July 26, 2010,

through July 25, 2013. Mr. Cribbs did not possess an exemption

during the period of March 8, 2012, through July 15, 2012.

33. None of the employees listed in the penalty worksheet

of the Seco nd Amended Order of Penalty Assessment can be

classified as an independent contractor, as defined in section

440.02(15)(d)1.

34. The class codes, manual rates, and average weekly wages

identified on the penalty worksheet of the Second Amended Order

of Penalty Assessment are correct to the extent a penalty is due.

CONCLUSIONS OF LAW

35. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter in this

p roceeding pursuant to sections 120.569 and 120.57(1), Florida

Statutes (2013).

36. The Department has the responsibility to enforce

workersÓ compensation requirements, including the requirement

that employers secure the payment of workersÓ compensation,

p ursuant to section 440.107(3), Florida Statutes (2013).

37. The Department has the burden of proof to show, by

clear and convincing evidence, that Respondents committed the

violations alleged in the Administrative Complaint. DepÓt of

Banking & Fin. v. Os borne Stern & Co. , 670 So. 2d 932, 935 (Fla.

1996)(the imposition of administrative fines which are penal in

nature and implicate significant property rights must be

justified by a finding of clear and convincing evidence of a

related violation); Ferris v. Turlington , 510 So. 2d 292 (Fla.

1987)(evidence must be clear and convincing to support penal

sanction such as revocation of a professional license).

38. The clear and convincing standard of proof has been

described by the Florida Supreme Court:

Clear an d convincing evidence requires that

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.

In re Davey , 645 So. 2d 398, 404 (Fla. 1994)(quot ing Slomowitz v.

Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983)).

39. Section 440.10(1)(a) provides in relevant part:

Every employer coming within the provisions

of this chapter shall be liable for, and

shall secure, the payment to his or her

employees, or any physician, surgeon, or

pharmacist providing services under the

provisions of s. 440.13 , of the compensatio n

payable under ss. 440.13 , 440.15 , and 440.16 .

Any contractor or subcontractor wh o engages

in any public or private construction in the

state shall secure and maintain compensation

for his or her employees under this chapter

as provided in s. 440.38 .

40. Section 440.02(16)(a) defines ÐemployerÑ to include

Ðevery person carrying on any employment.Ñ Section 440.02(17)

defines ÐemploymentÑ as Ðany service performed by an employee for

the person e mploying him or her.Ñ This definition excludes

certain types of labor and services not applicable here, and

includes, Ðwith respect to the construction industry, all private

employment in which one or more employees are employed by the

same employer.Ñ

4 1. Section 440.02(8) defines Ðconstruction industryÑ in

pertinent part as Ðfor - 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.Ñ

Allied Trucking of Fla. v. Lanza , 826 So. 2d 1052, 1052 - 1053

(Fla. 1st DCA 2002).

42. Section 440.02(15) (b) provides , in part , that any

person who is an officer of a corporation and who performs

services for remuneration for such corporation within this state,

w hether or not such services are continuous, is an employee.

43. Section 440.02(15) (b)1. p rovides , in part , that a

corporate o fficer may elect to be exempt from the requirements of

chapter 440 by filing a notice of election to be exempt with the

D epartment as provided in section 440.05 .

44. Under the doctrine of lent employment, a lending

employer, such as a help supply services company, is known as the

Ðgeneral employerÑ and the borrowing employer, the Ðspecial

employer.Ñ At common law, an employee lent by a general employer

is presumed to continue as an employee of the general employer,

not a borrowed servant of the special employer. Gayer v. Fine

Line Constr. & Elec., Inc. , 970 So. 2d 424, 427 (Fla. 4th DCA

2007); Derogatis v. Fawcett MemÓl Hosp. , 892 So. 2d 1079 (Fla. 2d

DCA 2004).

45. In the workersÓ compensation context, the Florida

Statutes extend immunity to a special employer who uses employees

of a Ðhelp supply services company.Ñ The definition of Ðhelp

supply services companyÑ includes Ðemployee leasing company.Ñ

Caramico v. Artcraft Indus., Inc. , 727 So. 2d 348, 349 (Fla. 5th

DCA 1999); Maxson Constr . Co. v. Welch , 720 So. 2d 588, 590 (Fla.

2d DCA 1998).

46. However, when a special employer utilizes an employee

leasing company, the special employer remains liable for securing

the payment of workersÓ compensation if payment has not been

secured by the employee leasing company. Section 440.11,

entitled ÐExclusiveness of liability,Ñ provides in

subsection (2):

The immunity from liability described in

subsection (1) shall extend to an employer

and to each employee of the employer which

uses the services of the employees of a help

supply services company, as set forth in

North American Industrial Classification

System Codes 561320 and 561330, when such

employees, whether management or staff, are

acting in furtherance of the employerÓs

business. An employe e so engaged by the

employer shall be considered a borrowed

employee of the employer and, for the

purposes of this section, shall be treated as

any other employee of the employer. The

employer shall be liable for and shall secure

the payment of compensati on to all such

borrowed employees as required in s. 440.10,

except when such payment has been secured by

the help supply services company. ( e mphasis

added) .

See Hazealeferiou v. Labor Ready , 947 So. 2d 599, 604 (Fla. 1st

DCA 2007); Tu - Lane Invs., Inc. v. Orr , 889 So. 2d 961, 963

(Fla. 1st DCA 2004).

47. Mr. Cribbs testified that he believed that Mr. Reed was

an employee of Action Labor. But even if Action Labor had been

the general employer of Mr. Reed on that day, Mr. Cribbs would

still be required to provide workersÓ compensation coverage for

Mr. Reed if Action Labor did not, as required by section

440.11(2) .

48. With respect to the status of Mr. Kingry,

section 440.02(15)(d)6. specifically excludes volunteers from the

definition of an employee. Un der the structure of the statute,

receiving remuneration is a part of the basic definition of

ÐemployeeÑ under section 440.02(15)(a):

ÐEmployeeÑ 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. ( e mphasis added) .

49. The Depar tmentÓs burden thus includes proof that

remuneration was received. There is no burden, in the nature of

an Ðaffirmative defense,Ñ for Respondents to prove that

Mr. Kingry was a volunteer. 2/

50. The Department offered no competent evidence to show

that Mr. Kingry received remuneration for his work. While

Investigator Brown did testify that Mr. Kingry told her that he

expected to be paid when she talked to him at the job site, that

testimony was hearsay and cannot itself support a finding that

Mr. Kingry was paid for his work. Mr. KingryÓs deposition

testimony, differing from the testimony of Mr. Cribbs, is

similarly hearsay. There was no suggestion that the deposition

fell under any exception that would allow its admission over

objection in a civil act ion. Petitioner failed to prove by clear

and convincing evidence that Mr. Kingry was an employee of

Mr. Cribbs or Michael Cribbs Construction of Pensacola, Inc.

Solomon v. Huddleston , 657 So. 2d 78, 79 - 80 (Fla. 1st

DCA 1995)(worker not an employee withou t evidence of monetary or

other compensation for services).

Computation of Penalty

51. Section 440.107(7)(d)1. provides:

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 employerÓs payroll during periods for

which it failed to secure the payment o f

workersÓ compensation required by this

chapter within the preceding 3 - year period or

$1,000, whichever is greater.

52. In order to compute the amount the employer would have

paid in premium, the Department must determine the rate of pay and

the period of employment. The statutes require employers to

maintain detailed business records containing this information and

to provide them to the Department when requested. § 440.107(5) ,

Fla. Stat . The Department has adopted Florida Administrative Code

Rule 69 L - 6.015, outlining the records that employers are required

to maintain and provide to the Department upon request. As noted,

Respondents did not provide most of this information to the

Department. Mr. Cribbs testified that he had maintained the

required records, but that they were later destroyed by flooding,

an act over which he had no control. However, Respondents cite no

authority, and research revealed none, to suggest that under such

circumstances the Department is precluded from imputing the

missin g information.

53. In the absence of sufficient business records, the

statute directs the Department to impute a weekly payroll for each

employee based upon the statewide average weekly wage as defined

in section 440.12 (2) multiplied by 1.5 for the time period

requested in the Business Records Request.

§ 440.107(7)(e) , Fla. Stat. ; Fla. Admin. Code R. 69L - 6.028(3 ).

54. Evidence at hearing suggested that Mr. Cribbs

individually became an employer only upon the administrative

dissolution of Michael Cribbs Construction of Pensacola, Inc., on

September 28, 2012. In light of RespondentsÓ failure to

adequately respond to the Business Records Request, however, the

DepartmentÓs imputation of wages for Mr. Reed may be extended back

for the full period over which records were requested from

Mr. Cribbs. Twin City Roofing Constr. Specialists, Inc. v. DepÓt

of Fin. Servs. , 9 69 So. 2d 563 (Fla. 1st DCA 2007)(employerÓs

failure to produce required business records necessary to

establish the duration of non - compliance takes precedence over

any evidence at hearing that actual length of noncompliance was

shorter).

55. Rule 69L - 6. 028(3) provides , in relevant part:

When an employer fails to provide business

records sufficient to enable the department

to determine the employerÓs payroll

for the time period requested in the

business records request for purposes of

calculating the pena lty provided for in

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

weekly payroll for each employee, corporate

officer, sole proprietor or partner shall be

calculated as follows:

(a) For each employee, other than corporate

officers, identified by the departmen t as an

employee of such employer at any time during

the period of the employerÓs non - compliance,

the imputed weekly payroll for each week of

the employerÓs non - compliance for each such

employee shall be the statewide average

weekly wage as defined in Sect ion 440.12(2),

F.S., that is in effect at the time the stop -

work order was issued to the employer,

multiplied by 1.5. Employees include sole

proprietors and partners in a partnership.

* * *

(b) If the employer is a corporation, for

each corporat e officer of such employer

identified as such on the records of the

Division of Corporations at the time of

issuance of the stop - work order, the imputed

weekly payroll for each week of the

employerÓs non - compliance for each such

corporate officer shall be the statewide

average weekly wage as defined in Section

440.12(2), F.S., that is in effect at the

time the stop - work order was issued to the

employer, multiplied by 1.5.

56. As for penalties assessed for the lapse in Mr. CribbsÓ s

exemption and for wages indicated in records for the six other

employees, penalties for wages paid by the corporation prior to

its dissolution on September 28, 2012, are attributable to the

corporation, while any penalties for wages paid after that date

are attributable to Michae l Cribbs d/b/a Michael Cribbs

Construction of Pensacola , Inc. No attempt was made here to

separately allocate those penalties. 3/

57. The Department did not meet its threshold burden of

proving that Mr. Kingry was an employee on July 25, 2013. The

imput ation of wages for his employment during the period for which

insufficient records were provided is therefore not appropriate.

DepÓt of Fin. Servs, Div. of WorkersÓ Comp. v. Decorative

Concrete & Curbing, Inc. , Case No. 08 - 5817 (Fla. DOAH Mar. 20,

2009; F la. DFS May 22, 2009).

58. Section 440.02(8) authorizes the D epartment to

establish standard industrial classification codes and

definitions for the construction industry by rule. As

stipulated, th e class codes, manual rates, and average weekly

wages id entified on the Penalty Worksheet are correct.

59. The portion of the penalty in the Second Amended Order

of Penalty Assessment based upon wages imputed to Mr. King ry -- the

sum of $23,598.38 -- should not be assessed. The remaining penalty

of $30,529.96 is appropriate.

RECOMMENDATION

Upon consideration of the above Findings of Fact and

Conclusions of Law, it is

RECOMMENDED t hat the Department of Financial Services,

Division of WorkersÓ Compensation, enter a final order

determining that Respondents violated the requirement in

chapter 440, Florida Statutes, to secure workersÓ compensation

coverage, and imposing a total penalty assessment of $30,529.96.

DONE AND ENTERED this 22nd day of August , 2014 , in

Tallahassee, Leon County, Florida.

S

F. SCOTT BOYD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of August , 2014 .

ENDNOTE S

1/ All references to statutes and rules are to the versions in

effect from 2010 through 2013, except as otherwise indicated. No

relevant changes in statutes or administrative rules were

identified during the time of the alleged violations.

2/ Under rules of statutory construction, the burdens would be

different had the definition initially included all workers and

had a subsequent section exempted volunteer workers from cove rage

requirements. See , e.g. , Purifoy v. State , 359 So. 2d 446, 448 -

449 (Fla. 1978).

3/ Such allocation is unnecessary because penalties accruing

to the corporation are the responsibility of Mr. Cribbs.

§§ 440.02(16)(a) & 440.107(7) (b) , Fla. Stat.

COPIES FURNISHED:

Alexander Brick, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

Michael James Rudicell, Esquire

Michael J. Rudicell, P.A.

4309 B Spanish Trail

Pensacola, Florida 32504

Julie Jones, CP, FRP, Agency Clerk

Department of Financial Services

Division of Legal 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 d ate 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.