18-004144 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. L And M Airconditioning System, Inc. Status: Closed Recommended Order on Monday, January 7, 2019.

Summary: Penalty of $29,740.86 based on actual payroll during audit period for failure to secure workers' compensation coverage.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No. 18 - 4144

L AND M AIRCONDITIONING SYSTEM,

INC.,

Respondent.

_______________________________/

RECOMMENDED ORDER

On October 17, 2018, Robert E. Meale, Administrative Law

Judge of the Division of Administrative Hearings (DOAH),

conducted the final hearing by videoconference in Lauderdale

Lakes and Tallahassee, Florida.

APPEARANCES

For Petit ioner: Tabitha G. Harnage, Esquire

Steven R. Hart, Qualified Representative

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

For Respondent: Lesl ie G. Michaud , pro se

L and M Air c onditioning System, Inc.

49 North Federal Highway, No. 206

Pompano Beach, Florida 33062

STATEMENT OF THE ISSUE

The issue is whether Respondent failed to secure workers'

compensation coverage for its employees and, if so, the amount of

the penalty to be assessed against Respondent.

PRELIMINARY STATEMENT

By Stop - Work Order and Order of Penalty Assessment served on

May 2, 2017 (SWO), Petitioner ordered Respondent to stop wo rk at

a particular worksite due to an alleged failure to secure the

payment of workers' compensation for its employees.

By Amended Order of Penalty Assessment served on

September 20, 2017, Petitioner assessed a penalty against

Respondent in the amount of $ 39,008.16. After Respondent

submitted business records, Petitioner recalculated the penalty

and served on October 30, 2017, a Second Amended Order of Penalty

Assessment imposing a penalty of $31,211.10. After Respondent

submitted additional business reco rds, Petitioner recalculated

the penalty and served on March 8, 2018, a Third Amended Order of

Penalty Assessment imposing a penalty of $29,740.86 (Third

Amended OPA).

Respondent timely filed a request for a formal hearing. On

August 7, 2018, Petitioner t ransmitted the file to DOAH.

At the hearing, Petitioner called two witnesses and offered

into evidence 14 exhibits: Petitioner Exhibits 1 through 14.

Respondent called one witness and offered into evidence no

exhibits. All exhibits were admitted.

The co urt reporter filed the transcript on November 15,

2018. Petitioner filed a proposed recommended order on

November 30, 2018.

FINDING S OF FACT

1. Respondent installs and maintains air conditioning and

heating equipment for residential and commercial applic ations.

On May 2, 2017, Respondent was installing a duct system at

3128 East Hillsborough Avenue in Tampa. Two of Respondent's

employees were performing work at the site and were not covered

by workers' compensation. Leslie Michaud is the president and

sole shareholder of Respondent.

2. The air conditioning installation work performed by

Respondent's employees is classified by the National Council on

Compensation Insurance (NCCI) as class code 5537. This code is

for "Heating, Ventilation, Air - Condition ing and Refrigeration

Systems Installation, Service and Repair . . . ." During the

audit period of May 3, 2015, through May 2, 2017 (Audit Period),

code 5537 bore two rates.

3. For the Audit Period, Respondent had no workers'

compensation coverage for an y of its employees, although it

maintained an exemption for Mr. Michaud. For the Audit Period,

Respondent's gross payroll was $213,327.49 exclusive of any

payments to Mr. Michaud. Applying the manual rates during the

Audit Period to the gross payroll yie lds unpaid workers'

compensation premium of $14,870.43.

CONCLUSIONS OF LAW

4. DOAH has jurisdiction. §§ 120.569 and 120.57(1), Fla.

Stat. (2018).

5. Petitioner must prove the material allegations by clear

and convincing evidence. Dep't of Banking & Fin . V. Osborne

Stern & Co. , 670 So. 2d 932 (Fla. 1996).

6. Section 440.10(1)(a) requires every employer covered by

chapter 440 to secure workers' compensation coverage for its

employees. Respondent is an employer because it carries on

employment. § 440.02 (16)(a). An employee is any person who

receives remuneration from an employer for work or service while

engaged in employment. § 440.02(15)(a).

7. Section 440.107(7)(d)1. provides for the use of the

manual rates to calculate the evaded workers' compensa tion

premium and directs Petitioner to assess against any employer

that has failed to secure the payment of workers' compensation a

penalty equal to the greater of $1000 or double the premium that

the employer would have paid under the manual rates for the

preceding two years. Therefore, the penalty is $29,740.86.

RECOMMENDATION

It is

RECOMMENDED that the Department of Financial Services,

Division of Workers' Compensation, enter a final order

determining that Respondent failed to secure workers'

compensa tion coverage for its employees during the Audit Period

and imposing a penalty of $29,740.86.

DONE AND ENTERED this 7th day of January , 2019 , in

Tallahassee, Leon County, Florida.

S

ROBERT E. MEALE

Administrative Law Judg e

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 7th day of January , 2019 .

COPIES FURNISHED:

Tabitha G. Harnage, Esquire

Steven R. Hart

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 4229

(eServed)

Leslie G. Michaud

L and M Air c onditioning System, Inc.

49 North Federal Hi ghway , No. 206

Pompano Beach, Florida 33062

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 part ies 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.