19-000630 Department Of Financial Services, Division Of Workers&Apos; Compensation vs. Smith's Interior Finishes, Llc Status: Closed Recommended Order on Friday, May 31, 2019.

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

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL

SERVICES, DIVISION OF WORKERS'

COMPENSATION,

Petitioner,

vs. Case No. 19 - 0630

SMITH'S INTERIOR FINISHES, LLC,

Respondent.

_______________________________/

RECOMMENDED ORDER

Administrative Law Judge Lynne A. Quimby - Pennock conducted

a hearing in this case by video teleconference on April 16,

2019 , at sites in Tampa and Tallahassee, Florida.

APPEARANCES

For Petitioner: Mattie Birster, Esquire

Department of Financial Services

Office of the General Counsel

200 East Gaines Street

Tallahassee, Florida 32399

For Respondent: Byron K. Smith, Jr.

Smith's Interior Finishes, LLC

17829 Laura Lee Drive

Shadyhills, Florida 34610

STATEMENT OF THE ISSUE

The issue is whether RespondentÓs request for an

administrative hearing wa s timely filed by virtue of the

doctrine of equitable tolling.

PRELIMINARY STATEMENT

On June 6, 2018, the Department of Financial Services,

Division of WorkersÓ Compensation (the Division or DWC), served

Respondent with a ÐSTOP - WORK ORDERÑ for its failure to obtain

workersÓ compensation coverage that meets the requirements of

cha pter 440, Florida Statutes (2018). On November 10, 2018, the

Division served Respondent, via certified mail, with an Amended

Order of Penalty Assessment (Amended Assessment). This Amended

Assessment informed Respondent that if Respondent wished to

contes t the $35,769.16 penalty assessment, a request for a

hearing must be filed within 21 calendar days . B y letter

(petition) filed with the Division on December 14, 2018,

Respondent admitted it was Ðpassed the 21 day deadline but was

hoping to file a petition .Ñ On January 10, 2019, the D WC issued

an Order to Show Cause requiring Respondent to show cause within

21 days why the petition should not be dismissed as being

untimely, specifically addressing whether there was any basis for

equitable tolling of the 21 - day filing deadline to request a

hearing.

Respondent filed a response on January 29, 2019. The D WC

referred the matter to the Division of Administrative Hearings

(DOAH) to conduct a hearing on the narrow issue of equitable

tolling.

At the hearing, the Division presented two witnesses: DWC

investigator James Acaba; and Bryan K. Smith, Jr. The DivisionÓs

Exhibits 4 t hrough 8 were accepted in evidence without objection.

Mr. Smith testified on behalf of Respondent.

A one - volume Transcript of the hearing was filed on May 8,

2019 . The Division timely filed a proposed recommended order,

which has been considered in the preparation of this Recommended

Order. To date, Respondent has not filed a post - hearing

submission.

All statutory references are to the 2 018 codification of the

Florida Statutes unless otherwise indicated.

FINDING S OF FACT

1. The Division is the state agency responsible for

enforcing the statutory requirement that employers secure the

payment of workersÓ compensation for the benefit of the ir

employees and corporate officers. § 440.107, Fla. Stat.

2. Respondent is a Florida limited liability company

engaged in the construction business. Its offices are located at

2474 Ambassador Ave nue , Spring Hill, Florida.

3. To enforce this requirem ent, the Division performs

random inspections of job sites and investigates complaints

concerning potential violations of workersÓ compensation rules.

4 . O n June 6, 2018, James Acaba, a Division compliance

inspector, conducted a compliance investigation a t a job site in

Lutz, Florida. Mr. Acaba observed two individuals working at the

job site: RespondentÓs owner, Mr. Smith; and Mr. SmithÓs step -

son.

5 . Mr. Smith claimed he had an exemption for himself.

Mr. Acaba ascertained that Mr. SmithÓs exemptio n expired on

January 19, 2017.

6 . Mr. Acaba determined that: Mr. SmithÓs step - son was

working for $12.00 an hour; had been working for Respondent for

about a week; and did not have workers compensation coverage.

7. On June 6, 2018, a Stop - Work Order and a Request for

Production of Business Records for Penalty Assessment Calculation

purposes were hand - served on Mr. Smith at the job site. The

Stop - Work Order contained an Order of Penalty Assessment, which

explained how a penalty is calculated, but gav e no specific

amount pending a review of RespondentÓs financial records.

Mr. Smith was advised to provide the requested business records

within 10 business days or by June 16, 2019.

8 . Mr. Smith requested information on how to have the Stop -

Work Order removed. Mr. Acaba explained to Mr. Smith several

options available to him to have the Stop - Work Order released:

obtain a workersÓ compensation policy; engage an employee leasing

company; or terminate the step - sonÓs employment. On June 14,

2018, Mr. Sm ith provided Mr. Acaba a letter reflecting

RespondentÓs Ðreduction in (its) workforce.Ñ On June 15, 2018,

Mr. Smith secured the reinstatement of his exemption to work for

Respondent. However, Mr. Smith did not provide the requested

business records.

9. On November 10, 2018, the Division served an Amended

Order of Penalty Assessment (Amended Order) at the address

Mr. Smith provided during the June 6, 2018 , job site encounter.

This Amended Order provided the total penalty amount of

$35,769.16.

10. Ac cording to Mr. Smith, his girlfriend, Samantha Nigh,

signed for the Amended Order on November 10, 2018, saw the large

amount of the penalty assessment, and Ðdecided not to showÑ it to

Mr. Smith. Ms. Nigh did not testify during the hearing.

11 . T he Amende d Order contained a Notice of Rights, which

stated that, if Respondent wished to contest the penalty, a

petition seeking a hearing had to be filed with the Division

within twenty - one calendar days of the Amended Order. It also

stated that the petition Ðmu st be filed with Julie Jones, DFS

Agency Clerk, Department of Financial Services, 612 Larson

Building, 200 East Gaines Street, Tallahassee, Florida 32399 -

0300 .Ñ T he Amended Order included the following:

FAILURE TO FILE A PETITION WIHTIN TWENTY - ONE

(21) CA LENDAR 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 December 3, 2018. Although the

actual due date was Saturday, December 1, 2018, Respondent could

have filed the petition by the close of business on Monday,

December 3, 2018 . Florida Administrative Code Rule 18.106.103.

12. Mr. Smith did not provide the date on which he became

aware o f the Amended Order. However, once he was aware of it,

Mr. Smith knew the 21 - day period to file a petition had expired,

and admitted at hearing Ðit was already too late .Ñ

13. On December 14, 2018, 33 days after the Division served

the Amended Order, an d 11 days after the actual due date, the

Division received RespondentÓs hearing request. As a result of

the late filing, the Division issued an Order to Show Cause

(OTSC) on January 10, 2019. The OTSC required Respondent to show

cause why the December 14 , 2018 , hearing request should not be

dismissed as untimely.

14. In the written response to the OTSC, Mr. Smith asserted

that his brother, Edward Unger, Ðwas only on the job site for the

one day,Ñ and Mr. Unger could Ðprovide proof of employment

elsewhe re fu r ther (sic) showing he was not of our employment at

the time.Ñ Additionally, the response provided that Ðdue to [an]

emergency family situation where Byron Smith, owner, had to take

a minor leave of absence to be with a close family member who had

em ergency open heart coronary bypass surgery. . ., the days and

dates got scrambled with emotions clouding what needed to be done

promptly.Ñ The Division construed this conversation as possibly

excusing the late filing and forwarded the matter to DOAH to

re solve that narrow issue .

15. During the hearing, Mr. Smith testified that his

girlfriend, Ms. Nigh, prepared the OTSC response, but that his

signature was on the document. Mr. Smith never clarified or

corrected that Mr. Unger was his brother or step - so n, and he

merely reiterated the family problem and personal issues, without

further detail or explanations, as his excuse. Lastly, Mr. Smith

admitted that at the time Mr. Acaba observed the two working on

June 6, 2018, he was breaking the rules, but Ðit w as a huge

penalty.Ñ

16. There is no credible evidence that Mr. Acaba gave

RespondentÓs owner, Mr. Smith any information that would cause

him to miss the deadline for filing the petition.

CONCLUSIONS OF LAW

17. The Division is responsible for enforcing the

requirement that employers subject to chapter 440 secure the

payment of workersÓ compensation by obtaining workersÓ

compensation coverage for their employees Ðthat meets the

requirements of [chapter 440] and the Florida Insurance Code.Ñ

§ 440.107(1), Fla. Stat.

18. Respondent contends that it had specific reasons for

its late request for a hearing. Respondent bears the burden of

proving by a preponderance of evidence that the doctrine of

equitable tolling applies.

19. The federal doctrine of Ðequit able tollingÑ was

incorporated into Florida's administrative jurisprudence by the

Florida Supreme Court in Machules v. DepÓt of Admin. , 523 So. 2d

1132, 1134 (Fla. 1988). ÐGenerally, the 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 Id. The doctrine has always

been applied sparingly. It requires more than a showing of me re

garden variety negligence or excusable neglect. One who fails to

act diligently cannot invoke equitable principles to excuse lack

of diligence. Baldwin Cnty. Welcome Ctr. v. Brown , 466 U.S. 147,

151 (1984). Based upon a review of the entire record an d

consideration of Machules in light of allegations made by

Respondent, it is concluded that, as a matter of law, Ðequitable

tollingÑ does not apply in this case. Mr. Smith failed to timely

request the hearing. The Division did not mislead Mr. Smith

thro ugh any actions or inactions.

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

confusing or unclear regarding when and where to file a petition

for hearing.

21. Application of the equitable tolling doctrine is not

warranted to excuse the untimely filing of RespondentÓs 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 that the Department of Financial

Services, Divi sion of WorkersÓ Compensation, enter a final order

dismissing RespondentÓs request for a hearing as untimely.

DONE AND ENTERED this 31st day of May , 2019 , in

Tallahassee, Leon County, Florida.

S

LYNNE A. QUIMBY - PENNOCK

Ad ministrative 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 Hea rings

this 31st day of May , 2019 .

COPIES FURNISHED:

Mattie Birster, Esquire

Department of Financial Services

Office of the General Counsel

200 East Gaines Street

Tallahassee, Florida 32399

(eServed)

Byron K. Smith, Jr.

Smith's Interior Finishes, LLC

17829 Laura Lee Drive

Shadyhills, Florida 34610

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.