12-0046. IN THE MATTER OF THE PETITION FOR FINDING OF FAILURE TO INSURE FOR WORKERS' COMPENSATION LIABILITY AND FOR ASSESSMENT OF A CIVIL PENALTY AGAINST ARMOUR CONSTRUCTION INC. and JOSEPH STARR Uninsured Employer Respondents.

Court:Alaska
 
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Alaska Workers Compensation Decisions 2012. Workers' Compensation Board 12-0046. IN THE MATTER OF THE PETITION FOR FINDING OF FAILURE TO INSURE FOR WORKERS' COMPENSATION LIABILITY AND FOR ASSESSMENT OF A CIVIL PENALTY AGAINST ARMOUR CONSTRUCTION INC. and JOSEPH STARR Uninsured Employer Respondents ALASKA WORKERS' COMPENSATION BOARD IN THE MATTER OF THE PETITION FOR FINDING OF FAILURE TO INSURE FOR WORKERS' COMPENSATION LIABILITY AND FOR ASSESSMENT OF A CIVIL PENALTY AGAINST ARMOUR CONSTRUCTION, INC., and JOSEPH STARR, Uninsured Employer RespondentsAWCB Decision No. 12-0046Filed with AWCB Anchorage, Alaska on March 7, 2012AWCB Case No. 700003260FINAL DECISION AND ORDERThis petition for a finding of failure to insure for workers' compensation liability and for civil penalty was heard in Anchorage, Alaska on November 16, 2011. Christine Christensen, Investigator for the Special Investigations Unit of the Alaska Department of Labor and Workforce Development, Division of Workers' Compensation, represented the State of Alaska (Division), appeared, and testified. No one appeared on behalf of Armour Construction, Inc. (Armour). As a preliminary matter, it was determined to proceed with the hearing in Armour's absence. This decision examines and memorializes that determination and decides the merits of the case. The record closed at the hearing's conclusion on November 16, 2011. ISSUES Because no one appeared at the hearing on Armour's behalf, it was necessary to determine whether to proceed with the hearing in Armour's absence as a preliminary matter. The Division did not take a position on the matter. 1. Was the decision to proceed with the hearing in Armour's absence correct. The Division contends Armour operated a business utilizing employee labor without filing proof of workers' compensation insurance and without workers' compensation insurance. The Division also contends that Joseph Starr, as Armour's president, should be personally liable for benefits to any employees injured while Armour was uninsured. The Division further contends a civil penalty should be assessed against Armour. Because Armour did not file a hearing brief and no one appeared on its behalf, its position is unknown. 2. Has Armour failed to file proof of workers' compensation liability? 3. Has Armour failed to provide workers' compensation insurance? 4. Should Mr. Starr, as Armour's president and treasurer, be held personally liable for benefits while Armour was uninsured? 5. Should Armour be assessed a civil penalty for its failure to insure? FINDINGS OF FACT Based on the record as a whole and hearing testimony, the following facts and factual conclusions are established by a preponderance of the evidence: 1) The State of Alaska Department of Commerce, Division of Corporations, Business and Professional Licensing records, indicate Armour is an Alaska corporation formed on February 5, 2007. (State of Alaska Business, Corporations and Professional Licensing printout). Its 2010 Biennial Report lists Joseph Starr as president and treasurer; Christina Starr is listed as secretary. (2010 Biennial Report). 2) Armour is registered in Alaska as a general contractor. (State of Alaska Department of Commerce Professional Licensing printout). 3) On March 26, 2010, the Division served a Petition for Finding of Failure to Insure, and for Assessment of Civil Penalty, as well as a discovery demand on Armour by certified mail. The mail was returned as unclaimed. (Affidavit of Service; Returned Mail). The petition named Armour and Mr. Starr as parties and asserted that Armour had been uninsured since September 1, 2009. (Petition, March 26, 2010). 4) On July 25, 2010, an Armour employee filed a workers' compensation claim for an eye injury that occurred while cutting metal. The employee was seeking payment of his medical costs. (Prehearing Conference Summary, Case No. 201005319, January 20, 2011) 5) On July 29, 2010, the Division again served the petition and discovery demand on Armour by certified mail. Again the mail was returned as unclaimed. (Christensen, Returned Mail). 6) On August 17, 2010, the Division faxed the petition and discovery demand, which was received by Armour. (Christensen, Fax Delivery Status Notification, August 17, 2010). 7) Mr. Starr spoke with Ms. Christensen on August 25, 2010, and said he believed Armour was insured. (Christensen). 8) On September 27, 2010, the Division filed an Amended Petition alleging Armour had been uninsured from December 20, 2007 through February 24, 2009, as well as after September 1, 2009. The Amended Petition again named Armour and Mr. Starr as parties. (Amended Petition, September 27, 2010). 9) The amended petition was served on Armour by regular mail and was not returned. (Affidavit of Service, September 27, 2010; Christensen). 10) On October 19, 2010, Armour responded by email to requests from the Division for more information. The email stated only that Armour had 772 employee hours in the third quarter of 2009, and a copy of a check to Liberty Northwest for $2,622.57 was attached. (Email from Armour to Christensen, October 19, 2010). The Division acknowledged Armour's email and requested documentation covering the entire time it had been uninsured. (Email, October 19, 2010). 11) The Division contacted Cory Collins of Liberty Northwest to inquire about the check. Ms. Collins responded stating Armour's policy had been cancelled for failure to report between April 1 and July 1, 2009. Ms. Collins explained that the check had been applied to Armour's policy, but because there was still a balance due the policy was not reinstated. (Email from C. Collins to Christensen, October 20, 2010). 12) On October 27, 2010, the Division sent Armour an email explaining Liberty Northwest's response. Attached to the email were copies of the amended petition and discovery demand. (Email from Christensen to Armour, October 27, 2010). 13) On December 17, 2010, the Division mailed two copies of a subpoena for discovery to Armour; one copy was sent certified return receipt and the other by regular mail. The copy sent certified mail was returned as unclaimed. (Christensen, U.S. Postal Service Track and Confirm print-out). 14) On January 10, 2011, the Division received an email from Armour stating the Starrs were out of state due to a family emergency until January 20, 2011. (Email from Armour to Christensen, January 20, 2011). 15) In a February 2, 2011 email, Mr. Starr contends Liberty Northwest erroneously cancelled the insurance police because Armour had filed the payroll report for the period from April 1, to July 1, 2009. (Email from Armour to Christensen, February 2, 2011). 16) On March 21, 2011, Armour provided documentation in response to the Divisions discovery request. (Christensen). 17) In February 24...

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