18-000619 Department Of Financial Servces, Division Of Workers&Apos; Compensation vs. Grandview Gardens Bed And Breakfast, Inc. Status: Closed Recommended Order on Tuesday, October 30, 2018.

Summary: DFS proved by clear and convincing evidence that Gardenview failed to secure workers' compensation for its employees and the Division properly calculated the penalty of $13,755.55.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERV I CES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No . 18 - 0619

GRANDVIEW GARDENS BED AND

BREAKFAST, INC.,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case on

June 25, 2018 , by video teleconference at sites in West Palm Beach

and Tallahassee, Florida, before Administrative Law Judge June C.

McKinney of the Division of Ad ministrative Hearings, pursuant to

the authority set forth in sections 120.569 and 120.57(1), Florida

Statutes.

APPEARANCES

For Petitioner: Tabitha G. Harnage, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent: Heinrich Rose , pro se

Grandview Gardens Bed and Breakfast, Inc.

1608 Lake Avenue

West Palm Beach, Florida 33401

STATEMENT OF THE ISSUE

The issue is whether Petitioner properly issued a Stop - Work

Order and Amended Order of Penalty Assessment against Respondent

for failing to obtain workers ' compensation insurance that meets

the requirements of chapter 440, Florida Statutes.

PRELIMINARY STATEMENT

On Aug ust 21, 2017, the Department of Financial Services,

Division of Workers ' Compensation ( " Division " or " Petitioner " ) ,

issued and served a Stop - Work Order and Order of Penalty

Assessment on Grandview Gardens Bed and Breakfast, Inc.

( " Grandview " or " Respondent " ), alleging that Respondent was not in

compliance with the coverage requirements of chapter 440. An

Amended Order of Penalty Assessment was issued on November 27,

2017.

On or about December 18, 2017 , Respondent challenged the

Stop - Work Order and A mended Order of Penalty A ssessment and

requested a formal hearing on the matter by p etition. The

p etition was transferred to the Division of Administrative

Hearings on February 7, 2018 , for assignment of an Administrative

Law Judge to conduct the hearing.

At hea ring, Respondent presented the testimony of four

witnesses : Heinrich Rose ; Peter Emmerich ; Jay Montgomery ; and

Jan Weimer. Respondent ' s Exhibits 1 through 6 were admitted into

evidence. The Division presented the testimony of two witnesses:

Jose Lopez , former compliance investigator and curr ent District II

Workers ' Compensation Administrator ; and Eunika Jackson , penalty

auditor. Petitioner ' s Exhibits 1 through 1 3 were received into

evidence.

The proceedings were transcribed, and the parties availed

th emselves of the right to submit proposed recommended orders.

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

Division of Administrative Hearings on August 23, 2018 .

Petitioner and Respondent timely filed proposed recommended orders

by t he deadline , which have been considered in the preparation of

this Recommended Order.

The parties stipulated to facts in the joint pre - hearing

s tipulation, and the relevant facts stipulated therein are

accepted and made part of the Findings of Fact below. Unless

otherwise noted, all statutory referen ces are to the Florida

Statutes ( 2017 ) .

FINDING S OF FACT

1. The Division is a component of the Department of

Financial Services. It is responsible for enforcing the workers '

compensation coverage requirement s pursuant to section 440.107.

2. At all times relevant to this proceeding, Grandview was

a corporation registered to do business in Florida.

3. Grandview is a bread and breakfast and was an active

company during the two - year a udit period from August 22, 2015,

through August 21, 2017.

4. On July 19 , 2017, 1/ Respondent met with a Henderson

Insurance agent and learned that Respondent was not in compliance

with the workers ' compensation requirements. Grandview

immediately requested bids to obtain insuranc e , but did not

purchase a policy because it was decided that it was " not the

right time. "

5. On August 21, 2017, Robert Feehrer ( " investigator " or

" Feehrer " ), compliance investigator for the Division, started a n

investigation of Grandview . Feehrer discov ered that Grandview

did not have any workers ' compensation policies, employee leasing

agreements, or exemptions on file with the National Council on

Compensation Insurance.

6. That same day the Division issued Grandview a Stop - Work

Order for Respondent ' s failure to secure the required workers '

compensation insurance coverage.

7. Petitioner also served Grandview with a Request for

Production of Business Records for Penalty Assessment Calculation

( " Request " ) asking for documentation to enable the Division to

evaluate the payroll for the audit period of A ugust 22, 2015,

through August 21, 2017, and to determine Respondent ' s compliance

with the Workers ' Compensation Law of Florida.

8. Grandview responded timely and provided sufficient

business records in r esponse to the Division ' s Request .

9. Eunika Jackson ( " auditor " or " Jackson " ), penalty auditor

for the Division, was assigned to Grandview ' s investigation.

Jackson reviewed the business records produced by Grandview .

10. Jackson concluded her audit b y properly calculating the

workers ' compensation amount owed by Grandview for the audit

period using the Class Code 9052 for lodging facilities . Jackson

applied the approved manual rates and methodology specified in

section 44 0 .107(7)(d).

11. Grandview had a t least four employees 2 / during the audit

period and did not have any exemptions from workers ' compensation

insurance coverage requirements during the audit period.

12. Initially, Jackson calculated Grandview ' s penalty

amount as being over $25,000. 00.

13. After Grandview timely provided sufficient business

records in response to the Request, Jackson correctly applied the

penalty reduction credit to the calculation and concluded

Grandview owed a reduced penalty amount of $13, 755.55.

14. On Novembe r 27, 2017, Respondent was served with the

Amended Order of Penalty Assessment totaling $13,755.55.

15. On December 18, 2017, Respondent challenged the penalty

assessment and requested a formal hearing.

CONCLUSIONS OF LAW

16. The Division of Administra tive Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto pursuant to section 120.569 and 1 20.57(1),

Florida Statutes (2018 ).

17. Chapter 440 is known as the Workers' Compensation Law.

Section 440.38(1) mandates th at employers secure payment of

workers' compensation for their employees.

18. " Employer" is defined, in part, as "every person

carrying on any employment." § 440.02(16)(a), Fla. Stat. "If

the employer is a corporation, parties in actual control of the

c orporation, including, but not limited to the president,

officers who exercise broad corporate powers who . . . directly

or indirectly own a controlling interest in the corporation, are

considered the employer for the purposes of ss. 440.105, 440.106,

and 440.107." § 440.02(16)(a), Fla. Stat.

19. "Employee" is defined, in part, as "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 a pprenticeship, express or

implied, oral or written." § 440.02(15)(a), Fla. Stat.

20. Because an administrative fine deprives the person

fined of substantial rights in property, such fines are punitive

in nature. Petitioner has the burden of proof and mu st establish

through clear and convincing evidence that Respondent violated

the workers' compensation law. Dep't of Banking & Fin., Div. of

Sec. and Investor Prot. v. Osborne Stern, Inc . , 670 So. 2d 932

(Fla. 1996).

21. It is unfortunate that Respondent did not obtain

workers ' compensation after soliciting a quote for insurance in

July 2017 . However, Florida law does not provide any exceptions

for unknowingly going into non - compliance as Respondent contends

in its proposed recommended o rder.

22. Instea d, t he greater weight of the evidence

demonstrates that Respondent employed at least four employees and

that Respondent was engaged in the lodging industry in Florida

during the audit period of August 2 2 , 201 5 , through August 2 1 ,

201 7 . Additionally, the r ecord shows Respondent failed to carry

workers' compensation insurance for its employees as required by

Florida's Workers' Compensation Law for the audit period.

Therefore, Petitioner met its burden in this matter and the

record is clear that Respondent ow es a total penalty amount of

$ 13,755.55 for failing to secure the payment of workers'

compensation insurance for its em ployees in violation of

chapter 440.

RECOMMENDATION

Based on the forgoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED tha t 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 $ 13,755.55 .

DONE AND ENTERED this 3 0 th day of October , 201 8 , in

Tallahasse e, Leon County, Florida.

S

JUNE C. MCKINNEY

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 30th day of October , 2018 .

ENDNOTE S

1/ Petitioner ' s Exhibit 10 , Item F , is the Henderson Insurance

letter documenting the date of the meeting.

2/ The undersig ned is not persuaded by Respondent ' s position that

it never employed more than three individuals during the audit

period because the exhibits support that Grandview was out of

compliance , and Respondent admitted at hearing that Grandview was

not in complia nce.

COPIES FURNISHED:

Heinrich Rose

Grandview Gardens Bed and Breakfast, Inc.

1608 Lake Avenue

West Palm Beach, Florida 33401

Tabitha G. Harnage, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

J ulie 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 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.