18-004515 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. S And M Construction Services, Llc Status: Closed Recommended Order on Monday, January 7, 2019.

Summary: Respondent failed to show that its untimely request for a hearing was excused by the doctrine of equitable tolling.

S TATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No. 18 - 4 515

S AND M CONSTRUCTION SERVICES,

LLC,

Respondent.

_______________________________/

RECOMMENDED ORDER

Administrative Law Judge D. R. Alexander conducted a hearing

in this case by video teleconference on November 20, 2018, at

sites in Sarasota and Tallahassee, Florida.

APPEARANCES

For Petitioner: Taylor Anderson, Esquire 1/

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

For Respondent: Patricia Morales, pro se

S & M Construction Services, LLC

6005 11th St reet East

Bradenton, Florida 34203 - 6932

STATEMENT OF THE ISSUE

The issue is whether Respondent's untimely request for an

administrative hearing is excused by the doctrine of equitable

tolling.

PRELIMINARY STATEMENT

On January 16, 2018, t he Department of Financial Services,

Division of Workers' Compensation (Department), served Respondent

with a Stop - Work Order for its failure to obtain workers'

compensation coverage that meets the requirements of chapter 440,

Florida Statutes. On May 21, 2018, the Department served

Respondent with an Amended Order of Penalty Assessment (Penalty

Assessment), which informed Respondent that if it wished to

contest the Penalty Assessment, a request for a hearing must be

filed within 21 calendar days. By lett er (petition) filed with

the Department on June 15, 2018, Respondent requested a hearing

to contest this action. After an Order to Show Cause was entered

by the Department requiring Respondent to show cause why the

petition should not be dismissed as bein g untimely, Respondent

filed a response alleging that the late filing was excused by

circumstances that the Department determined may invoke the

doctrine of equitable tolling. The matter then was referred by

the Department to the Division of Administrativ e Hearings (DOAH)

to conduct a hearing on that narrow issue.

At the hearing, the Department presented the testimony of

two witnesses. Department Exhibits 1 through 11 were accepted in

evidence. Exhibit 11 is the deposition testimony of Respondent's

manag ing agent, Patricia Morales. At the hearing, Respondent was

represented by Ms. Morales, who testified on behalf of the

company.

A one - volume Transcript of the hearing was prepared.

Proposed findings of fact and conclusions of law were filed by

the Depart ment on December 27, 2018, and they have been

considered in the preparation of this Recommended Order.

FINDING S OF FACT

1. The Department is the state agency responsible for

enforcing the requirement of the Workers' Compensation Law that

employers secur e the payment of workers' compensation coverage

for their employees and corporate officers. § 440.107, Fla.

Stat.

2. To enforce this requirement, the Department performs

random inspections of job sites and investigates complaints

concerning potential v iolations of workers' compensation rules.

3. On January 16, 2018, Hemant Balgobin, a Department

compliance inspector, conducted a compliance investigation at a

job site in Bartow, Florida. The inspection resulted in a

determination by Mr. Balgobin that R espondent was the responsible

entity supervising the job site, and three individuals employed

by Respondent did not have the required workers' compensation

coverage.

4. On January 17, 2018, a Stop - Work Order and Request for

Production of Business Record s was served on Ms. Morales. After

the business records produced by Ms. Morales were reviewed by the

Department, on May 21, 2018, the Department served her with a

Penalty Assessment proposing to assess the company a penalty in

the amount of $55,187.12.

5. The Penalty Assessment contained a Notice of Rights,

which stated that, if Ms. Morales wished to contest the penalty,

she must file a "petition for hearing so that it is received by

the Department within twenty - one (21) calendar days of your

receipt of this agency action." It also stated that the petition

"must be filed with Julie Jones, DFS Agency Clerk, Department of

Financial Services, 612 Larson Building, 200 East Gaines Street,

Tallahassee, Florida 32399 - 0300." Finally, the Notice of Rights

state d in bold capital letters, "FAILURE TO FILE A PETITION

WITHIN TWENTY - ONE (21) CALENDAR DAYS OF RECEIPT OF THIS AGENCY

ACTION CONSTITUTES A WAIVER OF YOUR RIGHT TO ADMINISTRATIVE

REVIEW OF THIS AGENCY ACTION." This meant that a petition had to

be filed and in the hands of the Agency Clerk no later than

June 11, 2018.

6. The petition was not filed until June 15, 2018. Because

the petition was filed four days late, the Department issued an

Order to Show Cause, which required Ms. Morales to show cause

w hy her petition should not be dismissed. In her response,

Ms. Morales asserted that she did not have a fax number for

filing a petition, so she contacted Mr. Balgobin, who told her to

fax it to him and "they would fax it to the right person." She

ess entially contends that this statement led her to believe that

by filing the petition with Mr. Balgobin, it would be treated as

a timely filing. The Department construed this conversation as

possibly excusing the late filing and forwarded the matter to

DOA H to resolve that narrow issue.

7. The record shows that on June 14, 2018, or after the

filing deadline was missed, Ms. Morales telephoned Mr. Balgobin

to ask "who to send it to," as there was no email or fax number

in the Notice of Rights. She testifi ed that he told her to fax

the petition to the Fort Myers office and it would be forwarded

to Tallahassee. After speaking with Mr. Balgobin, she prepared a

petition and then faxed it to the Fort Myers office the following

day, June 15, 2018.

8. In his testimony, Mr. Balgobin did not say whether he

spoke with Ms. Morales on June 14, 2018, or if he told her to fax

the petition to him. However, it is reasonable to find that he

did, because she faxed a petition to the Fort Myers office on

June 15, 2018, an d it then was forwarded by that office to

Tallahassee. However, all of these events occurred after the

deadline for filing a petition.

9. There is no credible evidence that Mr. Balgobin gave

Ms. Morales a specific date when the petition was due, and he

made no statements that caused her to miss the deadline. In

fact, on the few occasions that he spoke with Ms. Morales

throughout this process, he always reminded her to read the

Notice of Rights. It is not the practice of compliance

inspectors (or any ot her employee in the Fort Myers district

office) to tell persons when their petitions must be filed.

10. At hearing, Ms. Morales also contended that one reason

for the delay in filing a petition was because the Notice of

Rights listed only a street addres s in Tallahassee, and not a fax

number or email address. She explained that she attempted to

telephone the Agency Clerk in Tallahassee to secure that

information, but was unsuccessful. She gave no explanation as to

why the petition was not sent by mail t o the Tallahassee address

pursuant to the instructions in the Notice of Rights. The

undersigned has not credited Ms. Morales' assertion that she was

confused on where and how to send a petition, given the clear

instructions in the Notice of Rights.

11. M s. Morales also spoke by telephone with Ms. Almas, a

Department regulatory consultant in the Fort Myers office. The

record is confusing on the gist of those conversations because

Ms. Morales was unclear about when the calls occurred, and

whether the calls related to the deadline for filing business

records to take advantage of a penalty discount, filing her

request for a hearing, or filing a response to the Order to Show

Cause.

12. The record is clear, however, that Ms. Almas telephoned

Ms. Morales six days after the Stop - Work Order was issued in

January 2018 to remind her that all business records must be

filed within ten days in order to be eligible for a discount.

According to Ms. Almas, a second telephone conversation took

place on May 31, 2018, whe n Ms. Morales contacted her to ask why

she did not receive a discount on the penalty. At hearing,

Ms. Morales contended that during that call, Ms. Almas provided

her with a specific date on which the petition must be filed, and

that she timely filed he r petition in accordance with those

instructions. However, she could not recall the date allegedly

given to her by Ms. Almas.

13. Ms. Almas denied giving Ms. Morales a specific due date

for the petition and says she only referred her to the Notice of

R ights. She also denied providing any misleading information

that would cause Ms. Morales to late - file her petition. On this

issue, Ms. Almas' testimony is credited.

14. Finally, Ms. Morales acknowledged that she read the

Notice of Rights and she underst ood she had 21 calendar days in

which to request a hearing. She admitted that nothing prevented

her from filing a petition in a timely manner, but she "was just

trying to see how [she] would do it," since this was the first

time she was involved in an adm inistrative proceeding.

CONCLUSIONS OF LAW

15. The Department has the burden to show that the Penalty

Assessment was received and that Respondent's request for hearing

was untimely. As the party seeking to invoke the doctrine of

equitable tolling, Respo ndent has the burden of proof on that

issue. The standard of proof for each of the parties is a

preponderance of the evidence. § 120.57(1)(j), Fla. Stat.

16. The filing of a request for hearing takes place when

the request for hearing is received by the agency. Fla. Admin.

Code R. 28 - 106.104(1).

17. By a preponderance of the evidence, the Department

established that Ms. Morales was served with the Penalty

Assessment on May 21, 2018, and her petition was not received by

the Fort Myers office until Jun e 15, 2018, which then forwarded

the petition to the Tallahassee office on the same day. The

request for hearing was therefore untimely.

18. In Machules v. Department of Administration , 523 So. 2d

1132, 1134 (Fla. 1988), the Supreme Court held that the d octrine

of equitable tolling "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." Thus, a

pa rty's failure to timely file a petition sometimes can be

excused by application of the equitable tolling doctrine as a

defense. The doctrine is used sparingly and only in

extraordinary circumstances.

19. The issue presented here is whether any statements made

by Department employees caused Ms. Morales to miss the deadline

for filing her petition. As previously found, the evidence

supports a conclusion that the late - filing was the result of

Ms. Morales' own inattention and not the result of a n agency

mi srepresentation.

20. In short, the statements described herein do not rise

to the level of overcoming the effect of the clear language in

the Notice of Rights. See, e.g. , Xerox Corp. v. Fla. DepÓt of

ProfÓl Reg. , 489 So. 2d 1230, 1231 (Fla. 1st DCA 198 6) ("informal

and imprecise oral communications" from agency are insufficient

in form and substance to overcome the effect of a prior formal

notice as to the necessity of a timely petition).

21. There is no evidence that the Notice of Rights is

confusin g or unclear regarding when and where to file a petition.

22. Application of the doctrine is not warranted to excuse

the untimely filing of Respondent's petition. Therefore,

Respondent has waived its right to an administrative hearing.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Financial Services ,

Division of Workers' Compensation, enter a final order dismissing

Respondent's request for a hearing as untimely.

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

Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3 060

(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 .

ENDNOTE

1/ After the final hearing, substitute counsel identified below

entered an appeara nce for the Department .

COPIES FURNISHED:

Julie Jones, CP, FRP, Agency Clerk

Division of Legal Services

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399 - 0390

(eServed)

Patricia Morales

S & M Construction Service s, LLC

6005 11th Street E

Bradenton, Florida 34203 - 6932

Kyle Christopher, Esquire

Department of Financial Services

Office of the General Counsel

200 East Gaines Street

Tallahassee, Florida 32399 - 0333

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

Al l 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.