16-007184 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. David Feliciano, D/B/A D And S Handyman, Inc., A Dissolved Florida Corporation, And D And S Handyman, Inc. Status: Closed Recommended Order on Tuesday, February 28, 2017.

Summary: Respondent did not have workers' compensation insurance coverage for its sole employee, nor an exemption. The Department correctly calculated the penalty assessment, as found in the Amended Order of Penalty Assessment.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No. 16 - 7184

DAVID FELICIANO, d/b/a D AND S

HANDYMAN, INC., A DISSOLVED

FLORIDA CORPORATION , AND D AND S

HANDYMAN, INC.,

Respondent s .

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case on

January 30, 2017, via video teleconference sites in Lakeland and

Tallahassee, Florida, before Ad ministrative Law Judge Lynne A.

Quimby - Pennock of the Division of Administrative Hearings

(Division).

APPEARANCES

For Petitioner: Trevor S. Suter, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent s : David Feliciano Morant , pro se

111 2nd Street

Davenport, Florida 33837

STATEMENT OF THE ISSUE S

Whether Respondent s , 1/ David Feliciano, d/b/a D and S

Handyman, Inc., a Dissolved Florida Corporation, and D and S

Handyman, Inc., failed to provide w orkers Ó compensation coverage;

and, if so, what penalty should be imposed?

PRELIMINARY STATEMENT

On September 7, 2016, Petitioner, Department of Financial

Services, Divis ion of Workers Ó Compensation (Department), issued

and served a Stop - Work Order (SWO) and an Order of Penalty

Assessment against Respondent. Respondent, through its

owner/registered agent David Feliciano a/k/a David Feliciano

Morant , disputed the Order of Penalty Assessment, and on

November 17, 2016, the Department filed an Amended Order of

Penalty Assessment against Respondent, calculating the monetary

penalty at $6,859.70. The case was forwarded to the Division on

December 7, 2016, for the assignment of an administrative law

judge. The hearing was scheduled for January 30, 20 17, and

completed on that date.

At the hearing, the Department presented the testimony of

I nvestigator Richard Murvin and P enalty A uditor (PA) Christopher

Richardson. The Departmen t offered ten exhibits, all of which

were admitted into evidence. 2 / Respondent called Mr. Feliciano to

testify. Respondent did not offer any exhibits.

A transcript of the proceeding was ordered. The parties

were allowed, by rule, to submit a proposed re commended order

( PRO) to the undersigned ad ministrative law judge within ten days

of the filing of the transcript at the Division . The one - volume

Transcript was filed on February 14, 2017; the PROs were due

Friday, February 24, 2017. The Department timel y filed its PRO

which has been considered in the preparation of this Recommended

Order. To date, Re spondent has not filed any post - hearing

submissions .

References to statutes and rules are to the 2016 versions,

unless otherwise noted.

FINDING S OF FACT

1. The Department is the state agency responsible for

enforcing the various requirements of chapter 440, Florida

Statutes. Section 440.107(3) mandates, in relevant part, that

employers in Florida must secure workersÓ compensation insurance

coverage for thei r employees.

2. The testimony and evidence substantiates that D and S

Handyman, Inc., a D issolved Florida C orporation, is engaged in

the constru ction industry in Florida as D and S Handyman, Inc.,

and that David Feliciano is its sole proprietor.

3. On Se ptember 7, 2016, Investigator Murvin conducted a

random jobsite workersÓ compensation compliance investigation

(Compliance Investigation). Investiga tor Murvin spoke with

Mr. Feliciano who was working at a jobsite at 713 Lake Cummings

Boulevard , Lake Alfr ed, Florida. During their discussion,

Mr. Feliciano stated he had his own corporation (Respondent), and

that Respondent was a subcontractor of ANS Plumbing to this job.

Respondent was to install the plumbing at this jobsite .

Mr. Feli ciano claimed he h ad an exemption.

4. Investigator Murvin checked the Florida Department of

State, Division of Corporation sÓ , Sunbiz website to verify

RespondentÓs status. Mr. Murvin determined that David Feliciano,

d/b/a D and S Handyman, Inc., was no longer an active co rporation

but that when it was active, Mr. Feliciano was the sole corporate

officer and registered agent.

5. Investigator Murvin then checked the DepartmentÓs

Coverage an d Compliance Automated System ( CCAS) to see w hether

Respondent had a workersÓ compens ation insurance policy or any

current exemptions.

6. CCAS is the DepartmentÓ s internal database that contains

workersÓ compensation insurance policy information and exemption

information. Insurance providers are required to report coverage

and cancellati on information, which is then input into CCAS.

7. Investigator MurvinÓs CCAS search revealed that

Respondent had no workersÓ compensation coverage or exemptions

during the relevant period.

8. An exemption is a method by which a corporate officer

can exem pt himself from the requirements of chapter 440. See

§ 440.05, Fla. Stat.

9. Mr. Feliciano held an e xemption as RespondentÓs owner

from December 11, 2013 , until it expired on December 11, 2015.

10. Investigator Murvin then contacted ANS Plumbing and

co nfirmed that Respondent was subcontracted to install the

plumbing at the jobsite . ANS Plumbing also confirmed that

Mr. Feliciano of Respondent had an Ðexemption on file.Ñ 3 /

11. Finding no insurance in place, Investigator Murvin

contacted his supervisor, who directed him to issue the SWO. The

SWO was issued and served on Mr. Feliciano/Respondent on

September 7, 2016. Additionall y, a business records request

( BRR) was also served on Mr. Feliciano for RespondentÓs business

records. This BRR sought additi onal information concerning

RespondentÓs construction business between December 12, 2015

(the day after Mr. FelicianoÓs exemption expired) , through

September 7, 201 6 (the date the SWO issued ).

12. Respondent did not provide any business records to the

De partment in response to the BRR. The lack of business records

compelled the Department to use the imputation formula to

determine RespondentÓs payroll.

13. The Department assigned PA Richardson to calculate the

appropriate penalty. For the p enalty asses sment calculation,

PA Richardson consulted the classification codes listed in the

Scopes® Manual, which has been adopted by the Department through

Florida Administrative Code Rules 69L - 6.021 and 69L - 6.031.

Classification codes are assigned to various occ upations to

assist the calculation of workersÓ compensation insurance

premiums.

14. Based on the information obtained from the jobsite ,

PA Richardson assigned the appropriate class code for plumbing,

5183. 4 / PA Richardson determined the gross payroll fo r Respondent

for the entire period of non - compliance , which included two

separate periods of non - compliance, i.e. , December 12, 2015 ,

through December 31, 2015, and January 1 through September 2016.

There were different rates for each period. PA Richards on then

utilized the corresponding approved manual rates for those

classification codes and the related periods of non - compliance.

15. PA Richardson applied the correct approved manual rates

and correctly utilized the methodology specified in section

440. 107(7)(d)l. and rules 69L - 6.027 and 69L - 6.028 to determine

the penalty of $6,859.70.

16. The Department has demonstrated by clear and convincing

evidence that Respondent was engaged in the construction industry

(specifically plumbing) in Florida between D ecember 12, 2015 , and

September 7, 2016; that Respondent employed Mr. Feliciano; and

that Respondent did not have the requisite workersÓ compensation

insurance or an exemption to cover Mr. Feliciano during the

applicable period.

CONCLUSIONS OF LAW

17. The Division of Administrative Hearings has jurisdiction

over the subject matter of and parties to this proceeding pursuant

to sections 120.569 a nd 120.57(1), Florida Statutes.

18. Chapter 440 is kno wn as the Ð Workers Ó Compensation Law. Ñ

§ 440.01, Fla. Stat .

19. Pursuant to sections 440.10, 440.107(2), and 440.38,

every Ð employer Ñ is required to secure the payment of workers Ó

compensation for the benefit of its employees unless exempted or

excluded under chapter 440. Str ict compliance with the WorkersÓ

Com pensation Law is required by the employer. See C&L Trucking v.

Corbitt , 546 So. 2d 1185, 1187 (Fla. 5th DCA 1989); Dep Ó t of Fin.

Servs. v. L & I Consolidated Servs., Inc. , Case No. 08 - 5911 (Fla.

DOAH May 28, 2009; Fla. DFS July 2, 2009) .

20. Florida law defines Ð employment Ñ as Ð any service

performed by an employee for the person employing him or her Ñ and,

Ð with respect to the construction industry, all private employment

in which one or more employees are employed by the same employer. Ñ

§ 440.02(17)(a) a nd (b)2., Fla. Stat.

21. Section 440.02(8) defines Ð construction industry Ñ as

Ð for - profit activities involving any building, clearing, filling,

excavation, or a substantial improvement in the size or use of any

structure or the appearance of any land. Ñ T he Dep artment is given

authority to, Ð by rule, establish standard industrial

classification codes and definitions thereof which meet the

criteria of the terms Ò construction industry Ó as set forth in this

section. Ñ The Department has done so, in rule 69L - 6 .021,

specifically paragraph (2) (s).

22. The burden of proof in matters such as this is on the

Department because it is asserting the affirmative of the issue,

i.e. , that Respondent did not have workersÓ compensation insurance

in place for its employees o r have a valid exemption in place.

See Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

23. The administrative fines being proposed by the

Department are penal in nature. The standard of proof for such

cases is clear and convincing evidence. See DepÓt of Banking and

Fin., Div. of Sec. and Investor Prot. v. Osborne Stern and Co. ,

670 So. 2d 932 (Fla. 1996).

24. Clear and convincing evidence is an intermediate

standard of proof which is more than the Ðpreponderance of the

evidenceÑ standard used in most civil and administr ative cases,

but less than the Ðbeyond a reasonable doubtÑ standard used in

criminal cases. See State v. Graham , 240 So. 2d 486 (Fla. 2d DCA

1970). Further, clear and convincing evidence has been defined as

evidence which:

[R]equires 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 b e 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.

Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 1st DCA 1983)

(Citations omitted ) .

25. Section 440.107 requi res employers to obtain workersÓ

compensation insurance coverage for its employees and officers

(except that officers may obtain an exemption from coverage).

Subcontractors have the same responsibility as contractors for

obtai ning coverage for their employees. See § 440.10, Fla. Stat.

26. Section 440.107(7)(d)l. provides that the Department:

[S]hall assess against any employer who has

failed to secure the payment of compensation

as required by this chapter a penalty equal to

2 times the amount the employer would have

paid in premium when applying approv ed manual

rates to the employerÓ s payroll during periods

for which it failed to secure the payment of

workersÓ compensation required by this chapter

within the preceding 2 - year period or $1,000,

whichever is greater.

This statutory provision mandates that the Department assess a

penalty for non - compliance with chapter 440 and does not provide

any authority for the Department to reduce the amount of the

penalty.

27. Rule 69L - 6. 027 adopts a penalty calculation worksheet

for the Department Ós penalty auditors to utilize Ð for purposes of

calculating penalties to be assessed against employers pursuant to

sec tion 440.107, Florida Statutes.Ñ

28. The Department properly utilized the pe nalty worksheet

mandated by rule 69L - 6.027 and the procedure mandated by section

440.107(7)(d)1. and (7)(e) to calculate the penalty owed by

Respondent as a result of its failure to comply with the coverage

requirements of chapter 440.

29. The Department proved by clear and convincing evidence

that it correctly calculated the penalty in the amount of

$6,859.70.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered by the

Department of Financial Services imposing a penalty of $6,859.70

against Respondent, David Feliciano, d/b/a D and S Handyman,

Inc., a Dissolved Florida Corporation , and D a nd S Handyman, Inc.

DONE AND ENTERED this 28th day of February , 2017 , in

Tallahassee, Leon Count y, Florida.

S

LYNNE A. QUIMBY - PENNOCK

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.d oah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 28th day of February, 2017 .

ENDNOTE S

1 / For ease in read ing this Recommended Order, Respondents David

Feliciano, d/b/a D and S Handyman, Inc., a Dissolved Florida

Cor poration, and D and S Handyman, Inc., shall be referred to in

the singular as Respondent.

2 / Mr. Fel iciano ÐobjectedÑ to Exhibits 1 and 4; however , his

objections were not clear but rather an attack on the process.

3 / ANS Plumbing has the appropriate w orkers Ó compensation

coverage in place.

4 / PetitionerÓs PRO incorrectly provides Ðclass code 5038

(plumbing) because this code matched the description of the job

duties performed by Respondent.Ñ PA Richardson testified the

class code was 5183. See Tran script page 76, line 24; page 78,

line 3; and page 79, lines 1 and 3.

COPIES FURNISHED:

David Feliciano Morant

111 2nd Street

Davenport, Florida 33837

Trevor S. Suter, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Flori da 32399

(eServed)

Julie Jones, CP, FRP, Agency Clerk

Division of Legal Services

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 sub mit 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.