16-001192 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Pioneer Construction, Llc Status: Closed Recommended Order on Thursday, July 7, 2016.

Summary: Petition for hearing was filed with the agency 28 days late, and therefore dismissal is required. Equitable tolling was not available as a defense to the untimely filing.

equitable tolling provides a defense to the applicable deadline

for filing a petition for hearing.

PRELIMINARY STATEMENT

The Department of Financial Services, Division of WorkersÓ

Compensation (the ÐDepartmentÑ), served a Stop - Work Order and

Order of Penalty Assessment on Respondent, Pioneer Construction,

LLC (ÐRespondentÑ), on November 10, 2015. The Department

subsequently served an Amended Order of Penalty Assessment on

R espondent on Decembe r 29, 2015.

On February 16, 2016, the Department received a written

petition from Respondent disputing the penalty amount in the

Amended Order of Penalty Assessment.

The Department referred this matter to the Division of

Administrative Hearings (ÐDOAHÑ) on March 2, 2016, and requested

assignment of an Administrative Law Judge (ÐALJÑ) to conduct a

formal evidentiary hearing. With its referral, the Department

filed a Motion to Dismiss Petition asserting a threshold issue

regarding whether Respondent filed it s petition for hearing with

the Department within 21 days after Respondent received notice of

the DepartmentÓs Amended Order of Penalty Assessment.

The final hearing was held on May 26, 2016. The Department

presented the testimony of Gene Brimmer, an inve stigator with the

Department. Department Exhibits 1 through 8 were admitted into

evidence. Daniel Hedman testified on behalf of Respondent.

Respondent Exhibit 1 was admitted into evidence.

A one - volume Transcript of the final hearing was filed with

DOAH on June 24, 2016. At the close of the hearing, the parties

were advised of the ten - day deadline following DOAHÓs receipt of

the hearing transcript to file post - hearing submittals. Both

parties submitted post - hearing memorandums which were duly

considere d in preparing this Recommended Order.

FINDING S OF FACT

1. The Department is the state agency charged with

enforcing workersÓ compensation coverage requirements in Florida

including the requirement that employers secure workersÓ

compensation coverage for their employees. See § 440.107(3),

Fla. Stat.

2. On November 10, 2015, following an investigation to

determine whether Respondent had secured sufficient workersÓ

compensation insurance coverage, t he Department served a Stop - Work

Order on Respondent. Gen e Brimmer, an investigator with the

Department, personally served the Stop - Work Order on Respondent.

Mr. Brimmer hand - delivered the Stop - Work Order to D an iel Hedman,

RespondentÓs owner.

3. With the Stop - Work Order, Mr. Brimmer also provided

Mr. Hedman a document entitled Request for Production of Business

Records for Penalty Assessment Calculation. The Department

requested certain financial documents to calc ulate the

appropriate penalty.

4. Mr. Brimmer and Mr. Hedman met on November 25, 2015. At

this meeting, Mr. Hedman produced a number of RespondentÓs bank

statements and payroll records for the DepartmentÓs considerati on

in its penalty calculation.

5. Mr. Brimmer and Mr. Hedman met again on December 29,

2015. At this meeting, Mr. Brimmer p ersonally served on

Respondent an Amended Order of Penalty Assessment (the ÐPenalty

AssessmentÑ). The Penalty Assessment levied a total penalty of

$ 58,944.86 against Respondent.

6. On the back of the Penalty Assessment document was a page

entitled ÐNotice of Righ ts.Ñ The Notice of Rights advised

Respondent, in pertinent part:

You have a right to administrative review of

this action by the Department under sections

120.569 and 120.57, Florida Statutes.

To obtain review, you must file a written

petition requesting review.

* * *

You must file the petition for hearing so that

it is received by the Department within twenty -

one (21) days of your receipt of this agency

action. The petition must be filed with Julie

Jones, DFS Agency Clerk, Department of

Financ ial Services, 612 Larson Building,

200 East Gaines Street, Tallahassee, FL

32399 - 0390.

FAILURE TO FILE A PETITION WITHIN THE TWENTY -

ONE (21) DAYS CONSTITUTES A WAIVER OF YOUR

RIGHT TO ADMINISTRATIVE REVIEW OF THE AGENCY

ACTION.

Mr. Brimmer explained th e Notice of Rights to Mr. Hedman.

Mr. Brimmer discussed the 21 - day deadline for Respondent to

request a hearing with the Department to dispute the Penalty

Assessment.

7. In addition to the Penalty Assessment and Notice of

Rights, Mr. Brimmer provided Mr . Hedman with a Penalty Audit

Summary Report. This report included a Department auditorÓs

review of RespondentÓs payroll records. The auditor noted that

the records Mr. Hedman provided in November 2015, did not account

for RespondentÓs total labor costs for the preceding years. The

Penalty Audit Summary Report informed Mr. Hedman that, to

recalculate the penalty, a cash ledger would be required to

remove the imputed payroll amount.

8. In light of the Penalty Audit Summary Report, d uring the

December 29, 2015, meeting, Mr. Brimmer informed Mr. Hedman that

the Department would be willing to review additional business

records and consider whether to recalculate the penalty.

Mr. Brimmer told Mr. Hedman that he could have 20 business days

to produce more re cords. Mr. Brimmer, however, never guaranteed

that the additional documentation would result in a reduced

penalty . Neither did Mr. Brimmer represent that that Department

would issue ano ther penalty assessment order or another Notice of

Rights under whic h Respondent could file a request for an

administrative hearing .

9. Twenty - one days after December 29, 2015, was January 19,

2016.

10. On January 22, 2016, within 20 business days from his

meeting with Mr. Brimmer on December 29, 2015, (but, 24 days

afte r receiving the Notice of Rights) Mr. Hedman provided

additional business records to Mr. Brimmer on RespondentÓs

behalf. Mr. Brimmer testified that if the Department had

recalculated the penalty based on RespondentÓs supplemental

business records, it woul d have issued another penalty assessment

order. The new penalty assessment order would have included a

n ew Notice of Rights and a nother 21 - day period within which

Respondent could file a petition for hearing.

11. Unfortunately for Respondent, the additio nal business

records Mr. Hedman produced did not change the DepartmentÓs mind.

On February 2, 2016, Mr. Brimmer e - mailed Mr. Hedman informing

him that the Department would not be adjusting the Penalty

Assessment. As an additional consequence, because Mr. Hedman did

not submit a written request for a hearing by January 19, 2016,

Respondent missed the 21 - day deadline to file a petition for

administrative hearing to contest the Penalty Assessment .

12. Upon receiving Mr. BrimmerÓs e - mail, Mr. Hedman

panicked . He called Mr. Brimmer on February 9, 2016, to discuss

the status of the Penalty Assessment. Mr. Brimmer advised

Mr. Hedman t o review the Notice of Rights.

13. At the final hearing, Mr. Hedman testified that, based

on his conversation with Mr. Brimmer on December 29, 2015, he

understood that he had 20 business days to challenge the Penalty

Assessment. Mr. Hedman explained that, by providing additional

business records, he thought he had complied with what was needed

to contest the penalty. Mr. Hedman claimed that if Mr. Brimmer

had not requested additional records, he would have filed a

petition for hearing within 21 days.

14. Following his telephone conversation with Mr. Brimmer on

February 9, 2016, Mr. Hedman prepared a letter to the Department

req uesting a hearing to contest the Penalty Assessment. In his

letter, Mr. Hedman stated:

When I turned in those records [on January 22,

2016] Agent Brimmer stated this should Ðtake

care of thingsÑ so I thought things were being

taken care of and I was waiti ng for a

response. The response by e - mail didnÓt come

. . . until Feb. 2, 2016.

* * *

After speaking with Agent Brimmer and

explaining that I didnÓt know I needed to

apply for a hearing, since he had told me

submitting the requested records shou ld Ðtake

care of things,Ñ and furthermore certainly was

never told anything about a 21 - day deadline

for requesting such, Agent Brimmer said he

agreed and suggested I write to apply for a

hearing.

15. The Department received Mr. HedmanÓs request for a

hea ring on February 16, 2016.

16. Based on the evidence set forth at the final hearing,

the Department established that Respondent did not file its

petition requesting an administrative hearing with the Department

within 21 days of RespondentÓs receipt of t he Penalty Assessment.

Therefore, the legal issue to determine is whether RespondentÓs

petition should be dismissed as untimely filed, or whether

Respondent may circumvent the filing deadline based on the defense

of equitable tolling.

CONCLUSIONS OF LAW

1 7. DOAH has jurisdiction over the parties to and subject

matter of this proceeding pursuant to sections 120.569 and

120.57(1) .

18. Unless otherwise provided by law, persons seeking a

hearing regarding an agency decision shall file a petition for

hearing with the agency within 21 days of receipt of the agencyÓs

written notice. See Fla. Admin. Code R. 28 - 106.111(2). Any

person who fails to file a written request for a hearing within

21 days waives the right to request a hearing on such matters.

See Fla. Admin. Code R. 28 - 106.111(4). A request for hearing

that has been untimely filed shall be dismissed. See

§ 120.569(2)(c), Fla. Stat.

19. Filing Ðshall mean received by the office of the agency

clerk during normal business hours or by the presiding offi cer

during the course of a hearing.Ñ Fla. Admin. Code R. 28 -

106.104(1) . As detailed above, to meet with the 21 - day filing

requirement, RespondentÓs petition for hearing was to be received

by the Department no later than January 19, 2016. The facts

estab lish that the Department received RespondentÓs petition on

February 16, 2016, which is 49 days after the Department served

the Pen alty Assessment on Respondent.

20. Respondent failed to timely request a hearing to dispute

the Penalty Assessment. Therefor e, pursuant to section

120.569(2)(c), RespondentÓs petition for hearing must be

dismissed. See Cann v. DepÓt of Child. and Fam. Servs. , 813

So. 2d 237 (Fla. 2d DCA 2002) and Whiting v. Fla. DepÓt of Law

Enf. , 849 So. 2d 1149 (Fla. 5th DCA 2003).

21. Not wi thstanding the above, r ule 28 - 106.111(4) states

that equitable tolling is a defense to a personÓs failure to

request an administrative hearing within 21 days. ÐEquitable

tolling requires that the party be misled or lulled into inaction;

that he was prev ented from asserting his rights in some

extraordinary way; or that he has timely asserted his rights in

the wrong forum.Ñ Whiting , 849 So. 2d at 1151 (citing Machules v.

DepÓt of Admin. , 523 So. 2d 1132 (Fla. 1988)).

22. Based on the competent substantia l evidence in the

record, the undersigned concludes that Respondent failed to

establish a defense of equitable tolling of the 21 - day filing

deadline. The Notice of Rights served with the Penalty

Assessment clearly informed Respondent had it had 21 days to file

a petition for hearing with the Department. 2 / The DepartmentÓs

notice was proper, and Respondent knew the proper forum.

RespondentÓs explanation as to why it failed to timely file a

petition for hearing did not establish that it was misled or

lulle d into inaction, was prevented from asserting its rights in

some extraordinary way, or that it timely asserted its rights in

the wrong forum.

23. The undersigned finds this matter analogous to Whiting .

In Whiting , the agency served the appellant its deci sion via

certified mail, then, personally served a second copy of its

decision the following day. The appellant calculated his response

due date from the second service date. However, the appellant did

not file his request for appeal until the day after the response

deadline he calculated . Whiting ruled that the appellantÓs

Ðmistaken belief as to when the time period endedÑ was

insufficient to support a claim of equitable tolling. Whiting ,

849 So. 2d at 1151; see also Jancyn Mfg. Corp. v. State, DepÓt of

Health , 742 So. 2d 473, 476 (Fla. 1st DCA 1999)(wherein the court

refused to apply the equitable tolling doctrine where the failure

Ðwas the result of appellant's own inattention, and not the result

of a mistake or agency misrepresentationÑ).

24. The N otice of Rights explicitly notified Respondent

of its right to file a petition for hearing within 21 days.

Mr. Brimmer never represented that RespondentÓs opportunity to

produce additional business records abrogated or supplanted the

21 - day deadline. W hile Mr. BrimmerÓs presentation to Mr. Hedman

of two parallel Ð20 dayÑ time periods might not serve as the best

practice due to a possible miscommunication , 3 / Mr. Brimmer never

withdrew the Notice of Rights. Neither did he convey that the

Notice of Rights no longer applied to the Penalty Assessment or

that Respondent could disregard the significance of the 21 - day

filing date. At most, Mr. HedmanÓs decision to submit additional

payroll documents instead of a petition was based on his own

Ðmistaken beliefÑ that the Department would recalculate its

penalty assessment and issue another Notice of Rights. 4 /

Consequently, Respondent has not established that the DepartmentÓs

actions misled or lull ed it into inaction or somehow prevented it

from filing a request f or hearin g within the 21 - day deadline.

25. Accordingly, because section 120.569(2)(c) compels the

dismissal of untimely petitions, and because equitable tolling

provides no exception in this case, RespondentÓs request for an

administrative hearing must be dismissed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Florida Department of Financial

Services, Division of WorkersÓ Compensation, enter a final order

dismissing RespondentÓs request for an ad ministrative hearing as

untimely filed.

DONE AND ENTERED this 7th day of July , 2016 , in Tallahassee,

Leon County, Florida.

S

J. BRUCE CULPEPPER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Buil ding

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 7th day of July , 2016 .

ENDNOTE S

1/ All statutory references are to Florida Statutes (2016),

unless otherwise noted.

2/ The undersignedÓs conclusion would be the same even if

Mr. Hedman had produced the supplemental business records to

Mr. Brimmer by January 19, 2016. As plainly stated in the Notice

of Rights and pursuant to Fla. Admin. Code R. 28 - 106.111, to

request an administrative hearing, Respondent was required to

file a Ðpetition for hearingÑ with the Department within 21 days

of receipt of the Penalty Assessment.

3/ A wiser practice would be for the D epartment to offer a

shorter period of time for a business to produce records or to

e mphasize the rigidity of the 21 - day period in which to file a

petition for hearing.

4/ Mr. Brimmer did not inform Mr. Hedman that Ð this should Ò take

care of things Ó Ñ unt il he received RespondentÓs supplemental

business records on January 22, 2016. By this time, the 21 - day

time period for Respondent to request an administrative hearing

had already run.

COPIES FURNISHED:

Leon Melnicoff, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

(eServed)

Michael Cantrell, Esquire

Law Office of Michael L Cantrell, PA

Post Office Box 6876

Brandon, Florida 33508

(eServed)

Julie Jones, CP, FRP, Agency Clerk

Division of Legal Service s

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

(eServed)

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. An y exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.