15-005320 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Bert Halas, Iv Status: Closed Recommended Order on Tuesday, December 22, 2015.

Summary: Because Respondent was not, as alleged, a corporate officer of a company that remains delinquent in paying a penalty, Petitioner should grant Respondent's Notice of Election to Be Exempt from chapter 440.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION ,

Petitioner, Case No. 15 - 5 320

vs.

BERT HALAS, IV ,

Respondent.

/

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing by video teleconference on

November 12 , 201 5 , at sites in Tallahassee and Lauderdale Lakes,

Florida.

APPEARANCES

For Petitioner: Alexander Brick, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee , Florida 3 2 399

For Respondent: Bert L. Halas, IV, pro se

13480 Northwest 5th Street

Plantation , Florida 3 3325

STATEMENT OF T HE ISSUES

The issue s in this case are w hether Respondent is a

corporate officer of a company that remains delinquent in paying

a penalty assessed by Petitioner, an affiliation which would

render Respondent ineligible to make an effective election of

exemption from chapter 440 , Florida Statutes ; and , if so,

whether Petitioner should deny Respondent's Notice of Election

to Be Exempt for that reason.

PRELIMINARY STATEMENT

On August 21, 2015, Respondent Bert Halas, IV, filed a

Notice of Election to Be Exempt with Petitioner Department of

Financial Services, Division of Workers' Compensation, applying

for a certification of exemption from the insurance coverage

requirements and benefits of the Workers' Compensation Law. By

a letter dated September 4, 2015, the Dep artment notified

Mr. Halas that it intended to deny his election to be exempt,

citing Mr. Halas's affiliation as a corporate officer of JMD

Superior Services, Corp., a firm which is delinquent in paying a

stop - work order and penalty assessment order.

Mr. H alas timely requested a formal administrative hearing .

On September 23 , 201 5 , the Department referred the matter to the

Division of Administrative Hearings, where the case was assigned

to an Administrative Law Judge.

The final hearing took place as schedu led on November 12 ,

20 1 5, with both parties present. The Department called as a

witness Kevin Sterling , who at the time of the hearing was an

Operations and Management Consultant in the Exemption Unit of

the Bureau of Compliance . The Department's Exhibit s 1 through 5

were received in evidence as well . Mr. Halas testified on his

own behalf and offered n o exhibits.

The final hearing transcript was filed on December 7 , 20 15 .

The Department submitted a Proposed Recommended Order on

December 17 , 2015 , in accordance with the schedule established

at the conclusion of the hearing.

Unless otherwise indicated, citations to the official

statute law of the state of Florida refer to Florida Statutes

2015.

FINDINGS OF FACT

1. Petitioner Department of Fina ncial Services, Division

of Workers' Compensation (the "Department"), is the state agency

responsible, among other things, for (i) reviewing corporate

officers' applications for exemption from the requirements and

benefits of the Workers' Compensation Law and (ii) issuing

certifications of the election to those applicants who meet the

statutory criteria therefor and are not found ineligible to make

such election.

2. Respondent Bert Halas , IV ("Halas") , is the owner and

president of Halas Construction, Inc . As an officer of a

corporation engaging in the construction industry who elects an

exemption from chapter 440, Halas previously has obtained

certificate s of exemption , the most recent of which had an

effective date of July 30, 2013, and was valid for tw o years as

provided by statute. On or around August 21, 2015, Halas

submitted an application called a Notice of Election to Be

Exempt ÏÏ to renew his exemption.

3. By letter dated September 4, 2015, the Department

notified Halas that it intended to deny th e exemption based on a

determination that , at all relevant times, H alas was a corporate

off icer of , and thus affiliated with, JMD Superior Services,

Corp. ("JMD"), an entity which is delinquent in paying a stop -

work order and penalty assessment order. Bei ng affiliated with

a person who is delinquent in paying a penalty assessment makes

one ineligi ble for an election of exemption, and JMD was, in

fact, delinquent as of the date of the final hearing in this

matter. Therefore, Halas would be ineligible for a n exemption

if, as the Department alleges, he were a corporate officer of

JMD.

4. It is undisputed that, in documents filed with the

Department of State ("DOS") between May 2011 and August 2015,

Halas is identified as an officer or director of JMD. Each such

document bears the signature of Cesar Castaneda, JMD's

president. None , however, contains Halas's signature , and there

is no evidence in the record of Halas's having acted or held

himself out as a corporate office r or director .

5. Halas testified credibly at hearing, and the

undersigned finds, that he neither knew about nor consented to

Mr. Castaneda's naming him (Halas) as a corporate officer of

JMD , and that he had not agreed to serve in that capacity . The

undersigned credits Halas's testimony that he never knowingly

and voluntarily filled or performed the position of officer or

director of JMD and so finds.

6. Accordingly, i t is determined as a matter of ultimate

fact that Halas is not an "affiliated person" of JMD as that

t erm is defined in section 440.05(15) , which means that Halas is

not, in fact, ineligible for an election of exemption, as the

Department mistakenly believed.

CONCLUSIONS OF LAW

7 . The Division of Administrative Hearings has personal

and subject matter ju risdiction in this proceeding pursuant to

s ections 120.569 and 120.57(1), Florida Statutes.

8 . As the applicant for certification of an election to be

exempt from the provisions of chapter 440, 1 / Halas has the

ultimate burden of persuasion and must pro ve , by a preponderance

of the evidence, that he meets all applicable statutory

requirements. § 120.57(1)(j), Fla. Stat.; see Fla. Dep't of

Transp. v. J.W. C. Co. , 396 So. 2d 778 (Fla. 1st DCA 1981).

9 . The Department has burdens, too . Section 120.60(3)

provides as follows:

(3) Each applicant shall be given written

notice, personally or by mail, that the

agency intends to grant or deny, or has

granted or denied, the application for

license. The notice must state with

particularity the grounds or basis f or the

issuance or denial of the license , except

when issuance is a ministerial act. Unless

waived, a copy of the notice shall be

delivered or mailed to each partyÓs attorney

of record and to each person who has made a

written request for notice of agency action.

Each notice must inform the recipient of the

basis for the agency decision . . . .

(Emphasis added) . Thus, it is "the Department's burden to

provide specific reasons for the denial and to produce

competent, substantial evidence to support those reasons." N.W.

v. Dep't of Child. & Fam. Servs. , 981 So. 2d 599, 601 (Fla. 3d

DCA 2008).

10 . There is no question that if, as the Department

alleges, Halas were an officer or director of JMD, then Halas

would be ineligible for an election of exemption. See

§ 440.05(15)(f), Fla. Stat. The Department, however, offered no

persuasive evidence to rebut Halas's credible testi mony that he

was never a corporate officer of JMD.

11 . The only evidence that the Department presented on

this dispositive issue of material fact consist s of certified

copies of documents in JMD's file with DOS . This evidence

conclusively proves that the originals of these documents are on

file with DOS . See § 607.0127, Fla. Stat.

12. What the Department's evidence is not competent to

prove, however, is the truth of the ma tters asserted in the

documents. This is because documents on file with DOS are

merely hearsay if offered, as here, to prove that the

information contained in them is correct. In this regard,

section 607.0125 , Florida Statutes, provides as follows :

(4) The Department of State's duty to file

documents under this section is m inisterial.

The filing or refusing to file a document

does not:

(a) Affect the validity or invalidity of

the document in whole or part;

(b) Relate to the correctness or

incorrectness of information contained in

the document;

(c) Create a presumption that the document

is valid or invalid or that information

contained in the document is correct or

incorrect.

13 . The Department did not establish a basis for receiving

the file of JMD under an exception to the hearsay rule. Nor do

the documents in JMD 's file supplement or explain other

evidence. See § 120.57(1)(c), Fla. Stat. Therefore, although

the DOS - filed records were admissible pursuant to section

607.0127, they are not persuasive, or even competent, proof that

Halas was a corporate officer of J MD. Halas's testimony, in

contrast, was persuasive, substantial, and competent evidence

sufficient to establish that, more likely than not, he never was

a corporate officer of JMD.

14 . Halas meets the requirements for an exemption from

chapter 440, contrary to the particular reasons for denial of

certification set forth in the Department's notice of i ntended

action dated September 4, 201 5 .

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Depar tment of Financial

Services , Division of Workers' Compensation, (i) enter a f inal

o rder approving Halas's Notice of Election to Be Exempt and (ii)

issue a certification of the election to Halas .

DONE AND ENTERED this 22nd day of December , 20 15 , in

Tallahas see, Leon County, Florida.

S

___________________________________

JOHN G. VAN LANINGHAM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 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 December , 20 15 .

ENDNOTE

1 / The certification of the election of exemption which Halas

seeks in this proceeding is a license under section 120.52(10).

COPIES FURNISHED :

Alexander Brick, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

Bert L. Halas, IV

13480 Northwest 5th Street

Plantation, Florida 33325

Julie Jones, CP, FRP, Agency Clerk

Division of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

(eServed)

NOTICE O F 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.