18-005117 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Cable Wizard Corp. Status: Closed Recommended Order on Tuesday, January 15, 2019.

Summary: Nonagency party proved that its petition was timely filed under doctrine of equitable tolling because agency rep lulled or misled nonagency rep as to the deadline for filing.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No. 18 - 5117

CABLE WIZARD CORP.,

Respondent.

_______________________________/

RECOMMENDED ORDER

On December 3, 2018 , Robert E. Meale, Administrative Law

Judge of the Division of Administrative Hearings (DOAH),

conducted the final hearing by videoconference in Miami and

Tallahassee, Florida.

APPEARANCES

For Petitioner: Mattie Birster, Esquire

Leon Melnicoff, Esquire

Department of Financial Services

Office of the General Counsel

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent : Daniel R. Vega, Esquire

Taylor Espino Vega & Touron, P.A.

201 Alhambra Circle, Suite 801

Coral Gables, Florida 33134

STATEMENT OF THE ISSUE

The issue is whether Respondent's otherwise - untimely filing

of a request for a hearing on a proposed penalty for failing to

secure workers' compensation coverage is timely due to the

doctrine of equitable tolling.

PRELIMINARY STATEMENT

By Stop - Work Order for a Specific Worksite served on

October 26, 2017 (SWO) , Petitioner ordered Respondent to stop

work on a named worksite due to an alleged failure to secure the

payment of workers' compensation for one or more subcontractors

or employees of such contractors.

By Amended Order of Penalty Assessmen t served on March 2,

2018, Petitioner assessed a penalty against Respondent in the

amount of $63,202.87.

By Petition for Formal Administrative Hearing filed on

March 29, 2018 (Petition) , Respondent requested a hearing.

By Order to Show Cause issued on July 27, 2018, Petitioner

noted that the Petition was untimely filed and gave Respondent an

opportunity to show cause why Petitioner should not dismiss the

P etition. By affidavit filed on August 14, 2018, Respondent's

president attested that Petitioner's investigator had tol d the

president that the filing deadline was 21 business days, not

21 calendar days.

On September 25, 2018, Petitioner transmitted the file to

DOAH to conduct a formal hearing solely on the issue of whether

the Petition was timely filed under the doctrine of equitable

tolling.

At the hearing, Petitioner called no witnesses and offered

into evidence 11 exhibits: Petitioner Exhibits 1 through 11.

Respondent called two witnesses and offered into evidence one

exhibit: Respondent Exhibit 3 . All exhibits were admitted

without objection.

The court reporter filed the transcript on December 17,

2018 . The parties filed pr oposed recommended orders on

January 2, 2019 .

FINDING S OF FACT

1. The parties do not dispute that an Amended Order of

Penalty Assessment dated February 21, 2018 (APO) , assesses a

penalty of $63,202.87 for Respondent's failure to secure workers'

compensation coverage; Petitioner served the APO on Respondent on

March 2, 2018; the APO provides Respondent with 21 "calendar"

d ays from receipt within which to file a request for a hearing;

Respondent filed the Petition on March 29; and March 29 is 29

calendar days and 19 business days after March 2.

2 . Respondent engages in the business of digging ditches

and installing condui t and pipes . On October 26, 2017,

Jean Carlos Hernandez, Petitioner's investigator, visited a

worksite of Respondent. Determining that Respondent had failed

to secure workers' compensation coverage, as required by law,

Mr. Hernandez served the SWO , a Req uest for the Production of

Business Records (RPBR) , and an unrelated document upon Jorge

Clark, Respondent's president and sole shareholder . Complicating

this case, from the investigator's perspective, Mr. Hernandez

also issued orders stopping work to three other corporations that

were involved in the same work as Respondent.

3. The RPBR orders Respondent to email relevant business

documents within ten " business " days of receipt of the request.

The RPBR warns that a failure to email timely the request ed

business records will result in Petitioner's imputing

Respondent's payroll for the purpose of calculating the penalty

for failing to secure workers' compensation coverage .

4. In addition to "hereby" ordering Respondent to stop

work, the SWO also states : "A penalty against the Employer is

hereby ordered in an amount" equal to double the amount that the

employer would have paid in premiums, but not less than $1000, as

based on a statutory formula that is summarized in the SWO.

Despite the use of "hereby " for the penalty , the SWO imposes no

penalty because Petitioner's calculation of the penalty takes

place after the service of the SWO ; this part of the SWO operates

more as notice to the employer that Petitioner will assess a

penalty and the formula for i ts calculation .

5. When he gave Mr. Clark the three completed forms,

Mr. Hernandez explained that Mr. Clark could obtain relief from

the order stopping work by paying $1000 to Petitioner .

Mr. Hernandez also told Mr. Clark that he had ten b usiness days

to provide the req u e sted business records.

6. The next day, Mr. Clark delivered $1000 to Petitioner

and obtained a conditional release of the order stopping work.

Mr. Clark demonstrated compliance with workers' compensation

coverage by providing a letter confirming that Respondent had

terminated the subcontractors who had been found on the worksite.

During a brief conversation, Mr. Hernandez reminded Mr. Clark to

s ubmit the requested business r ecords within ten business days,

as reflected by the notes of Mr. Hernandez.

7. On the six th business day after October 26 , as is his

practice, Mr. Hernandez called Mr. Clark and reminded him that

this was the sixth business day of the ten business days that he

had to produce the requested business records. On the tenth

business day , Mr. Clark produced the requested business records ,

on which Petitioner relied, almost entirely , to calculate the

penalty that it later assessed .

8. After Petitioner completed the calculation of the

penalty, Mr. Hernandez called Mr. Clark and asked him to come

into the office to pick up the APO . On March 2, 2018, Mr. Clark

visited Petitioner's office and obtained the APO from

Mr. Hernandez .

9. The APO acknowledges the assessable penalty described in

the SWO and assesses the above - described penalty . The APO

incorporates a Penalty Calculation Worksheet, which reveals that

$ 239.12 of the assessed penalty is derived from imputed wages.

10. Mr. Hernandez and Mr. Clark spoke briefly in

Petitioner's office on March 2. Mr. Hernandez testified that he

advised Mr. Clark, as stated in the APO, that he had

21 " calendar " days to file a request for hearing and 20 business

days to produce additional busi ness records. Mr. Clark testified

that Mr. Hernandez told him that he had 21 "business" days to

file a request for hearing. Mr. Clark's testimony is credited.

11. During the hearing, Petitioner's counsel repeatedly

asked Mr. Clark if he had read the pro vision of the APO that ga ve

Respond ent 21 calendar days within which to file a request for a

hearing. The purpose of this questioning appears to have been to

show that, given the straightforward nature of this filing

deadline , Mr. Clark could not possibly have been misled or lulled

by anything that Mr . Hernandez could say, even if he had

misstated the filing deadline in business, rather than calendar,

days.

12. T he simpler the requirement , the harder it should be to

prove that the subject of the requireme nt has been misled or

lulled into action or inaction resulting in noncompliance . In

other words, as a practical matter, Respondent would have a much

harder time proving that Mr. Clark had been misled or lulled if

the APO consisted of nothing more than Res pondent's name, the

assessed penalty , and a boldfaced warning i n large font: "YOU

HAVE 21 CALENDAR DAYS FROM RECEIPT OF THIS ORDER TO FILE A

REQUEST FOR A HEARING. NO AGENCY EMPLOYEE MAY EXTEND OR CHANGE

THE DEADLINE. IF YOU MISS THE DEADLINE, YOU DO NO T GET A

HEARING. NO EXCEPTIONS."

13. Implying that , if Mr. Clark had read the APO, he would

have drawn a firm understanding the he had 21 calendar days to

file a request for hearing, Petitioner implies that the APO is no

less clear than th e hypothetical document . But the forms that

Mr. Hernandez gave Mr. Clark are not so clear in terms of filing

deadlines. For a nonlawyer like Mr. Clark, the APO is

complicated by t he business - and calendar - day deadlines set forth

in the SWO and APO, as well as the business - day deadline set

forth in the RPBR, and contingencies attached to calendar - day

deadlines that might confuse an atto rney. These confusing

features of the forms that Mr. Hernandez gave Mr. Clark make it

harder to understand the forms , including the APO, and likelier

that Mr. Clark would instead rely on what Mr. Hernandez told him

about the applicable deadline , so as lay the foundation for

Mr. Clark to be misled or lulled by inaccurate information .

14. As Petitioner insists, t he SWO provides a clear point

of entry of 21 calendar days to file a re quest for hearing on the

order stopping work, but it is not so clear whether the employer

may also challenge , at that time, the yet - to - be - calculated

penalty or, if it does not, whether the employer may challenge

the penalty when it is later calculated. At this point, three

things probably were evident to Mr. Clark: Respondent could not

continue to work on the subj ect worksite; based on what

Mr. Hernandez told him, Mr. Clark could obtain r elief from the

order stopp ing work by paying $1000; and Respondent had not yet

been fined. It is doubtful that Mr . Clark thought much about the

calendar - day deadline in the SWO because of the absence of an

actual consequence at the moment . As noted above , Mr. Clark

promptly paid the $1000, and Petitioner lifted the order stopping

work, so Mr. Clark found that he could rely on Mr. Hernandez and

his description of Respondent's rights and responsibilities .

A lso, a few days later, when Mr. Hernandez called h im , Mr. Clark

likely understood that the deadline in the RPBR ran in business

days.

15 . In March 2018, Mr. Clark learned of the amount of the

penalty. According to his testimony, which is credited,

Mr. Clark knew immediately that he could not accept such a large

penalty without ex ercising his right to a hearing .

16 . After Mr. Hernandez told Mr. Clark that he had

21 business days to file a request for hearing on the penalty,

Mr. Clark calendared the deadline and visited his lawyer's office

shortly prior to the expira tion of a 21 - business - day deadline --

but after the expiration of a 21 - calendar - day deadline -- to have

him prepare and file a request for hearing. As noted above,

Mr. Clark had promptly attended to his responsibilities in

connection with t his matter on two prior occasions when he

immediately delivered $1000 to obtain relief from the order

stopping work and when he time ly submitted business records:

Mr. Clark met every deadline about which Mr. Hernandez told him .

17 . There are several reas ons that Mr. Hernandez's

testimony is not credited as to what he told Mr. Clark on

March 2 , but these findings about the March 2 conversation are

not intended to suggest that Mr. Hernandez is lying about what he

told Mr. Clark. It appears merely that Mr. Hernandez's memory

and notes of what was a routine transaction for him are mistaken .

18. Mr. Hernandez's deposition was taken on November 15,

2018 , which was less than three weeks prior to the hearing . The

notice did not require him to produce any documents, and he had

none with him. Although Mr. Hernandez mentioned several times

that he had taken notes, he had not brought them to the

deposition and seemingly had not reviewed them prior to the

deposition , so his deposition testimony is a good r eflection of

his independent memory of the March 2 conversation .

19. In three respects, t he brief deposition undermines

Mr. Hernandez's credibility as a witness . First, early in the

deposition, Mr. Hernandez refused to answer routine questions

about pa st employment and a routine question about the hours of a

present part - time job . 1 / It is unclear whether he was attempting

to prevent any inquiry into his other employment or whether he

was attempting to discourage a robust inquiry into the matter at

issue in this case. Either way, his lack of cooperation struck

an unsettling note .

20. S econd, at the time of the deposition, Mr. Hernandez's

recollection o f the events was so vague as to establish that he

has no present recol lection of any encounter with Mr. Clark .

Mr. Hernandez did not seem entirely sure that Mr. Clark had paid

the $1000 a nd Respondent had released the order stopping work.

Dep. , p. 23. 2 / Three times, Mr. Hernandez did not recall that

Mr. Clark had submitted requested business records. Dep. Tr . ,

pp. 24, 27 - 28. Mr. Hernandez did not seem to recall that he

called Mr. Clark on the sixth business day to remind him of the

deadline to produce business records within ten business days,

Dep . Tr . , p p. 27 - 28, even though Mr. Hernandez's notes state that

he made the call. Mr. Hernandez di d not recall whether his

meeting on March 2 with Mr. Clark occurred in Mr. Hernandez's

office or in the field. Dep. Tr . , pp. 28 - 29.

21. Third , Mr. Clark had no independent recollection of the

March 2 conversation during his deposition. W hen asked if he had

any recollection of talking to Mr. Clark on that day,

Mr. Hernandez answered, "I can't recall off the top of my head

right now." Dep . Tr . , p. 32. When asked, "so you don't know

what he said to you, or what you said to him; correct?"

Mr. Hernandez answered, "Off the top of my head, no." Dep . Tr . ,

p. 32. Later, Mr. Hernandez added that he remembered giving

Mr. Clark the APO and explaining it, but this seems to have been

a statement of cu stomary practic e than a present recollection .

Dep . Tr . , pp. 3 4 - 35.

22 . At the time of the March 2 meeting, Mr. Hernandez had

been employed as an investigator for Petitioner a little over one

year and had been working on his own for a little less than one

year. Understandably, he is still acquiring knowledge that he

requires to perform his job. For instance, during his

deposition, Mr. Hernandez seemed confuse d when asked to define

calendar days. He stated, "Calendar days include Mondays through

Fridays, all days, including holidays." When asked about the

de adline if the 21st day is a holiday, Mr. Hernandez testified

that the holiday counted, so the required act had to be done by

the deadline, even if it were a holiday or a weekend, even though

he had seemed earlier to exclude weekends from calendar days.

De p . Tr . , pp. 37 - 38.

23. I t is difficult to understand why Mr. Hernandez would

have mentioned during the March 2 meeting the business - day

deadline for producing business records, as he testified. As

noted above, more business record s could reduce the as sessed

penalty by only about $200 . The modest amount of implied wages

seems to suggest that Petitioner had found the already - produced

business records to be nearly complete. T here was thus no

practical reason for Mr. Hernandez to mention the business - day

deadline for p roducing more business records . Clearly, the focus

of both men on March 2 was on the deadline for filing a request

for a hearing on the assessed penalty . If, as Mr. Clark recalls,

Mr. Hernandez only addressed this deadline, which makes sense,

and Mr. Clark only heard "business" days, the most likely

explanation is that Mr. Hernandez misspoke.

24 . Mr. Hernandez made a note stating that he told

Mr. Clark that he had 20 business days to produce more records

and 21 calendar days to file a request for a hearing.

Mr. Hernandez testified at the hearing that he routinely takes

handwritten notes, at the time of the events described in the

notes and later enters them into Petitioner's computer system,

but he did not identify exactly when he mad e or entered the notes

at issue in this case, except that that he departed from his

normal practice because he did not first make the crucial March 2

note in handwriting. In any event, the above - noted problems with

Mr. Hernandez's testimony establish that this note, regardless of

when prepared, is inaccurate.

25 . B ased on the foregoing, Mr. Hernandez inadvertently

misled or lulled Mr. Clark into filing the Petition after the

deadline set forth in the APO. Extending the deadline in

accordance with e quit able tolling, the otherwise - late filing is

timely.

CONCLUSIONS OF LAW

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

Stat. (2018).

27 . By a preponderance of the evidence, § 120.57(1)(j ),

Respondent has the burden of proving that it timely filed its

Petition under the doctrine of equitable tolling. Cf. River wood

Nursing Ctr., LLC v. Ag. for Health Care Admin. , 58 So. 3d 907,

911 (Fla. 1st DCA 2011).

28 . Since 1998, pursuant to chapter 98 - 200, section 4, at

page 1831, Laws of Florida, section 120.569(2)(c) has provided:

A petition shall be dismissed if it is

not in substantial compliance with these

requirements or it has been untimely

filed . . . . This paragraph does not

eliminate the availability of equitable

tolling as a defense to the untimely filing

of a petition.

29 . The doctrine of equitable tolling is stated i n Machules

v. Department of Administration , 523 So. 2d 1132 (Fla. 1988), in

which an investigator of the predecessor agency of Petitioner

missed three consecutive days of work due to alcoholism. Relying

on a rule allowing the termination of an employee for abandonment

of his job , the employing agency advised the employee of its

proposed determination of an abandonment and gave the employee

20 days within which to file a r equest for a hearing before

another agency . Instead, the investigator took the notice to his

union representative, who filed a contractual grievance . The

employing agency set the hearing on the grievance for the day

after the time ran for filing a reques t for an administrative

hearing, and, at the grievance hearing, the grievance was

dismissed as not cognizable under the labor agreement. The

investigator requested the agency that heard abandonment cases to

toll the deadline for filing a request for a hea ring, but the

agency determined that it lacked the authority to do so.

30. The court held that the investigator's hearing request

was timely filed based on equitable tolling of the filing

deadline . The court stated that equitable tolling arises when

the petitioner "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."

523 So. 2d at 1134. The court found that the agency's

participa tion in the grievance process through the timeframe

within which the employee could have filed a request for a formal

hearing misled the employee, and the employee had also timely

asserted his rights in the wrong forum.

31. When Mr. Hernandez misinformed Mr. Clark that he had

21 business days to file a request for hearing , Mr. Hernandez

misled or lulled Respondent into filing its request for hearing

late. Applying equitable tolling to the 21 - calendar - day

deadline , Respondent timely filed the Petition , and Petitioner

must allow Respondent a formal hearing.

RECOMMENDATION

It is

RECOMMENDED that the Department of Financial Services ,

Division of WorkersÓ Compensation , enter a final order

determining that the Petition was filed timely under the doctrine

of equi table tolling .

DONE AND ENTERED this 1 5 th day of January , 2019 , in

Tallahassee, Leon County, Florida.

S

ROBERT E. MEALE

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 15 th day of January , 2019 .

ENDNOTE S

1 / Respondent's counsel did not press the mat ter when

Mr. Hernandez refused to answer an innocuous question as to what

he had done for a living prior to his employment as an

investigator for Petitioner . Mr. Hernandez answered only , "I do

not feel comfortable answering that question." When asked why,

Mr. Hernandez demanded, "Is it relevant to the case?" Dep.,

p. 6. Other than late r testifying that he had worked in the

"security industry , restaurants, casino ," Dep . Tr . , p. 9,

Mr. Hernandez never identified his prior jobs. Later in the

deposition, again without a contemporaneous objection from

Petitioner's counsel, Mr. Hernandez declined to answer another

routine question. Asked for his schedule for his part - time

security job, where he presently works weekends, Mr. Hernandez

repl ied that it does not interfere with his state employment,

adding, "This is going into personal. You just mentioned that

you don't want to jump into something personal. It's a scheduled

position. But you're asking those questions." Dep.,

pp. 11 - 12. Respondent's counsel moved on.

2 / Mr. Hernandez testified, "I believe so," when asked these

questions.

COPIES FURNISHED:

Daniel R. Vega, Esquire

Taylor Espino Vega & Touron, P.A.

201 Alhambra Circle , Suite 801

Coral Gables, Florida 33134

(eServed)

Mattie Birster, Esquire

Leon Melnicoff, Esquire

Department of Financial Services

Office of the General Counsel

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

Paul Washington, Esquire

Taylor Espino Vega & Touron, P.A.

201 Alhambra Circle , Su ite 801

Coral Gables, Florida 33134

(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 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.