18-004245 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Digital Accessories Corporation Status: Closed Recommended Order on Wednesday, November 7, 2018.

Summary: Respondent filed its request for administrative hearing after 5:00 p.m. on the day it was due.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No. 18 - 4245

DIGITAL ACCESSORIES CORPORATION,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice to all parties, a final hearing was

conducted in this case on October 8, 2018 , via teleconference

with sites in Tallahassee and Jacksonville , Florida, before

Administrative Law Judge R. Bruce McKibben of the Divis ion of

Administrat ive Hearings (ÐDOAHÑ). The parties were represented

as set forth below.

APPEARANCES

For Petitioner: Taylor Anderson, Esquire

Department of Financial Services

200 East Gaines Street

Tall ahassee, Florida 32399

For Respondent: Laura J. Benson, pro se

Digital Accessories Corporation

Suite 100

2021 Art Museum Drive

Jacksonville, Florida 32207

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent, Digital

Accessories Corporation (ÐDigitalÑ), timely filed a request for

a formal administrative hearing pursuant to Florida

Administrative Code Rule 28 - 106.111(2).

PRELIMINARY STATEMENT

On December 6, 2017, Petit ioner, Department of Financial

Services, Division of WorkersÓ Compensation (the ÐDepartmentÑ),

issued a Second Amended Order of Penalty Assessment (the

ÐSecond OPAÑ) and served it on Digital ; that is, to its

representative, Laura Benson. Mrs. Benson, on b ehalf of

Digital, prepared and filed a request for a formal

administrative hearing. The Department rejected the request

for hearing as being untimely, and Digital requested an

administrative hearing to contest that determination. Th e

instant proceeding r esulted.

At the final hearing, the Department called one witness:

David Gallegos, a compliance investigator. The Department

offered its Exhibits 1 through 11, each of which was admitted

into evidence. Mrs. Benson testified on behalf of Digital.

Digita lÓs E xhibits 1 through 5 were admitted into evidence.

A t ranscript of the final hearing was ordered; it was filed

at DOAH on October 25, 2018 . The parties agreed to submit

proposed recommended orders ( Ð PRO Ñ ) within 10 days after the

Transcript was filed with DOAH in accordance with r ule 28 -

106.216 . Each party timely submitted a PRO , and each was duly

considered in the preparation of this Recommended Order.

Unless specifically stated otherwise herein, all references

to Florida Statutes concerning the sub stantive facts of this case

shall be to the 2018 version.

FINDING S OF FACT

Based upon the evidence presented, the demeanor and

credibility of the witnesses, and the entire record in this case,

the following Findings of Fact are made:

1 . The Department is the state agency responsible for

monitoring the provision of workersÓ compensation insurance by

employers in this state.

2 . Di gital is a family business. It s owner

(Mrs. BensonÓs father) created a company called Central Voice,

Inc. (ÐCentralÑ) , in 196 9 as a retail business. The business

was run by Mrs. BensonÓs family, i.e., her parents and

siblings. After some years of operation, the family created

another corporation, Digital, to deal with the wholesale side

of the business. Again, this business w as run by the family,

most of who m worked primarily for Central. Central properly

maintained workersÓ compensation insurance coverage for the

family members/employees. Digital really only had one

functional employee ; a store manager, and some part - time h elp

on an as needed basis . Mrs. BensonÓs father, as owner of the

company, also worked for Digital. In recent years, both

companies were Ðsurviving, not thriving,Ñ according to

Mrs. Benson.

3 . As a result of the businessesÓ struggles, the family

decid ed that payment of the familyÓs salaries would be split

between Digital and Central as a means of each business sharing

some of the financial burden. In an abundance of caution,

Mrs. Benson inquired of her insurance carrier whether Digital

needed workers Ó compensation insurance since its ÐemployeesÑ

were primarily employees of Central and Central insured those

persons. She was wrongly advised that the employees were

sufficiently covered under CentralÓs policy.

4 . On August 14, 2017, investigator Gallego s conducted an

inspection at the businesses for the purpose of assuring that

the companies were compliant with workersÓ compensation

requirements. Mrs. Benson gave Gallegos copies of CentralÓs

workersÓ compensation insurance information and explained to

h im what her carrier had told her concerning the need for a

policy for Digital employees. Gallegos explained to

Mrs. Benson that, despite what she was told , Digital had more

than four employees (on the books) and was required to have

workersÓ compensation coverage for them unless they were

exempted. Mrs. Benson immediately went on - line to add her

younger brother and sister to the list of officers of Digital

so they could apply for exemptions.

5 . Based on his findings, Gallegos determined that

Digital w as not in compliance with workersÓ compensation

requirements. He then prepared a Stop - Work Order (ÐSWOÑ),

which he handed to Mrs. Benson on the spot. The SWO contained

a notice of rights, which was explained to Mrs. Benson by

Gallegos, and imposed an est imated minimum penalty of $1,000.

He also discussed with Mrs. Benson that she might reduce the

ultimate penalty by 25 percent if she would timely, i.e.,

within 20 days, provide certain business records to the

Department. Mrs. Benson obtained a $1,000 mon ey order the very

next day and, along with the records she believed had been

requested, delivered the money order and the financial

documents to the Department within two days.

6 . About two months later, on October 11, 2017, the

Department issued an Ame nded Order of Penalty Assessment

(ÐOPAÑ) and served it on Digital. Despite having paid the

$1,000 minimum penalty and providing all the records she

believed had been requested -- and even being told by someone at

the Department that she had provided more th an requested -- the

OPA asserted a penalty of $28,490.12. Mrs. Benson was

incredulous at this assessment, because not only had Digital

(and Central) always attempted to comply with workersÓ

compensation requirements, she had tried to do exactly what the

Dep artment asked of her. In fact, while Gallegos was still at

her office that day, she copied the additional records he

requested and gave them to him.

7 . On December 6, 2017, Mrs. Benson went to the

DepartmentÓs local office. She was hand - served the Se cond OPA,

which amended the penalty to $27,485.68. Again, Mrs. Benson

was incredulous. She had continuously attempted to cooperate

with the Department and acted in good faith. But not only did

she fail to r eceive the 25 percent discount alluded to earli er,

her efforts seemed to have made little difference in the

assessment. The Second OPA contained a notice of rights which

directed Digital as follows:

ÐYou have a right to request a hearing . . . to

contest this agency action. [Y]ou must file

the petiti on for hearing so that it is received

by the Department within twenty - one (21)

calendar days of your receipt of this agency

action.Ñ

The Second OPA concluded, in capital letters and in

bold font :

Ð FAILURE TO FILE A PETITION WITHIN THE

TWENTY - ONE (21) CALENDAR DAYS OF RECEIPT OF

THIS AGENCY ACTION CONSTITUTES A WAIVER OF

YOUR RIGHT TO ADMINISTRATIVE REVIEW OF THE

AGENCY ACTION .Ñ

8 . The notice of rights did not specify a time of day

that the request for hearing must be filed with the Department.

Mrs. B enson presumed she had until 11:59 p.m. on December 27,

2017, of the twenty - first day to file her request for a

hearing. (The notice of rights did not specify a date either,

leaving it up to the affected business to calculate the twenty -

first day on its o wn.)

9 . After being served with the Second OPA, the holiday

season ensued, including Christmas, Hanukah, and Kwanzaa, among

others. Mrs. Benson and others from Digital took time off from

work to be with family and celebrate the holidays. Upon

return ing to work on December 26, 2017, the day after Christmas

and the first workday after the holidays, Mrs. Benson was

inundated with numerous work - related tasks. At some point she

remembered the request for hearing and turned to that item of

business. She disc overed that the request was due the next

day, December 27, 2017, and immediately set about preparing the

request for hearing and related attachments. She put together

all of the information, not without considerable effort, and

made arrangements to ship i t to Tallahassee for submission to

the Department. Through social media, her family contacted a

friend in Tallahassee who agreed to pick up the request from a

printer and deliver it to the Department. Mrs. Benson had

rationally assumed that she had until 11:59 p.m. to submit the

petiti on, as neither the SWO nor the O PAs contained a 5:00 p.m.

deadline.

10 . The family friend picked up the request from the

printer sometime on December 27, 2017. He immediately drove to

the DepartmentÓs headquarters at 200 East Gaines Street, Larson

Building, Tallahassee , Florida. When he arrived, at just after

8:00 p.m., the building was locked and there was no one

available to accept the request. The friend then slipped the

request under the door of the building, taking a picture of it

through the glass door to show that it had been ÐdeliveredÑ to

the Department on the date that it was due. Meanwhile,

Mrs. Benson diligently searched the DepartmentÓs website and

found that she could also email the request, which she did

at 9:42 p.m. that same day.

11 . The Department, as is its custom and practice,

clocked the request in as received on the next morning,

December 28, 2017, i.e., one day after it was du e. The

Department relied upon r ule 28 - 106.104(3) , which states that:

Ð Any document . . . received after 5:00 p.m. shall be [deemed]

filed as of 8:00 a.m. on the next regular business day.Ñ Based

on that rule, the Department rejected the request for hearing,

finding that it was not timely filed.

12 . Digital requested an ad ministrative hearing to

contest the rejection of its req uest for hearing on the Second

O PA. The instant proceeding ensued.

13 . Mrs. Benson credibly explained the reasons that

DigitalÓs request for a hearing was late. She noted that, to

begin with, she was very angry at the Department for rejecting

her sincerely - filed financial documents when first requested.

Digital has always paid its taxes and has tried to be a good

corporate citizen. Digital had no frame of reference to help

it understand the SWO a nd related documents; it had never been

in that position before. Digital had never been fined or cited

for improper workersÓ compensation insurance, always striving

to do what was right and legal.

14 . The holiday season was also a major contributing

fa ctor. Whoever at the Department decided to deliver the

Second O PA to Digital on December 6, making the response due

just two days after Christmas, may just have had a mean streak.

Why not just serve the Second O PA on December 4, making it due

on Christma s day? It is completely reasonable for a layperson

to believe that the holiday season would have an effect on time

frames for filing a petition for hearing. It would have been

simple for the DepartmentÓs representatives to have made the

requirement for f iling BEFORE FIVE OÓCLOCK clear and precise,

but there is no legal requirement for the Department to do so.

15 . The Second OPA did not, in its bold print,

capitalized statement regarding a response, indicate that there

was a 5:00 p.m. cutoff for filing the request. Nor,

apparently, did the person who served the Second OPA on

Mrs. Benson address that fact.

16 . Alas, these very understandable and rational reasons

for not filing the request for hearing timely do not obviate the

requirement to do so. Nor does lack of familiarity with the

Florida Administrative Code excuse a layperson from complying

with its rules. Mrs. Benson simply did not know. Best

intentions, and all that.

CONCLUSIONS OF LAW

17 . The Division of Administrative Hearings has

jurisdict ion over the parties to and the subject matter of this

proceeding pursuant to sections 120.569 and 120.57(1), Florida

Statutes.

18 . Section 120.57(1)(j ) dictates that in formal

administrative hearings, ÐFindings of fact shall be based upon

a preponderance of evidence, except in penal or licensure

disciplinary proceedings or except as otherwise provided by

statute.Ñ

19 . Rule 28 - 106.111 states:

(2) Unless otherwise provided by law,

persons seeking a hearing on an agency

decision which does or may deter mine their

substantial interests shall file a petition

for hearing with the agency within 21 days

of receipt of written notice of the

decision.

* * *

(4) Any person who receives written notice

of an agency action and who fails to file a

written request for a hearing within 21

days waives the right to request a hearing

on such matters. This provision does not

eliminate the availability of equitable

tolling as a defense.

20 . Section 120.569(2)(c) provides that a request for an

administrative hearing Ð s hall be dismissed . . . if it has been

untimely filed.Ñ (Emphasis added) . The statute also notes that

the defense of equitable tolling is available. See Pro Tech

Monitoring, Inc. v. DepÓt of Corr. , 72 So. 3d 277, 281 (Fla. 1st

DCA 2011).

21 . ÐThe equit able tolling doctrine has been applied when

the plaintiff has been misled or lulled into inaction, has in

some extraordinary way been prevented from asserting his rights,

or has timely asserted his rights mistakenly in the wrong forum.Ñ

(Citations omitted ) . Machules v. DepÓt of Admin. , 523 So. 2d

1132, 1134 (Fla. 1988).

22 . There is no evidence in this case that Digital was

prevented from filing its request for a hearing, nor misled from

doing so. Although there was a lot going on in the holidays and

M rs. Benson was extremely busy, no one prevented the filing of

the request. It would be a stretch of the Machules standard to

suggest that Mrs. Benson was misled, though she certainly had

reason to be confused.

23 . Not so clear is whether Digital was lu lled into

inaction. Clearly, the onset of the holiday season , just when

the request was due , created extreme distractions. Noting she

was already frustrated with the Department for being so strict

and unyielding, refusing to talk reasonably, Mrs. Benson was not

focused on the hearing request during her holiday break. She was

thus lulled into inaction, though by her own volition.

24 . Further, Mrs. Benson correctly notes that the very

important notice of rights, in bold and capital letters ,

nonetheless, said nothing whatsoever about the request being due

by 5:00 p.m. Nor did the notice cite to r ule 28 - 106.104(3),

which sets 5:00 p.m. as the deadline for filing any document with

the Department. Conversely, the notice did cite to other

statutes and admin istrative rules, but not the time rule. Had

the rule requiring filing by 5:00 p.m. been cited, it is probable

Mrs. Benson would have attempted to comply , the same as she

attempted to comply with her mistaken 11:59 p.m. deadline.

25 . Although I nvestigato r Gallegos discussed the Second OPA

with Mrs. Benson when he delivered it, he did not suggest to her

that she must file her request on or before 5:00 p.m. He did

stress the 21 - day deadline and that it was important to comply

with that time frame. As Mrs. Benson testified, she is a

lay person and is certainly not conversant with the law that

applies in these kinds of situations. Thus, she relied upon the

Department to advise her of all her rights and responsibilities.

26 . Taking all the facts and applyi ng the law as it exists,

Digital did not (technically, legally) file its petition for a

formal administrative hearing timely. However, when the

Department ultimately assigns its penalty, the entirety of the

facts ought to be taken into consideration.

RE COMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is hereby RECOMMENDED that:

Petitioner, Department of Financial Services, enter a Final

O rder deeming the request for hearing filed by Respondent,

Digital Accessories Corpora tion, not timely filed.

DONE AND ENTERED this 7th day of November, 2018 , in

Tallahassee, Leon County, Florida.

S

R. BRUCE MCKIBBEN

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Ap alachee 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 November, 2018 .

COPIES FURNISHED:

Taylor Anderson, Esquire

Dep artment of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

Laura J. Benson

Digital Accessories Corporation

Suite 100

2021 Art Museum Drive

Jacksonville, Florida 32207

(eServed)

Julie J ones, 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 Reco mmended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.