12-0047. IN THE MATTER OF THE PETITION FOR FINDING OF FAILURE TO INSURE FOR WORKERS' COMPENSATION LIABILITY AND FOR ASSESSMENT OF A CIVIL PENALTY AGAINST TROPHY SIGN GIFT and ART GALLERY INC. RANDALL C. BERRY AND BETH HAYWARD -BERRY Uninsured Employer Respondents.
Alaska Workers Compensation Decisions 2012. Workers' Compensation Board 12-0047. IN THE MATTER OF THE PETITION FOR FINDING OF FAILURE TO INSURE FOR WORKERS' COMPENSATION LIABILITY AND FOR ASSESSMENT OF A CIVIL PENALTY AGAINST TROPHY SIGN GIFT and ART GALLERY INC. RANDALL C. BERRY AND BETH HAYWARD -BERRY 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 TROPHY SIGN GIFT and ART GALLERY, INC., RANDALL C. BERRY, AND BETH HAYWARD -BERRY, Uninsured Employer RespondentsAWCB Decision No. 12-0047Filed with AWCB Anchorage, Alaskaon March 7, 2012AWCB Case No. 700003075FINAL DECISION AND ORDERA hearing was held on this petition for a finding of failure to insure for workers' compensation liability and for civil penalty in Anchorage, Alaska on September 7, 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. Randall Berry appeared telephonically on behalf of Trophy Sign Gift and Art Gallery, Inc. (Trophy). No evidence was taken, and the hearing was continued when Mr. Berry explained the sewer had backed up at Trophy's place of business requiring his immediate attention. The continuation of the hearing was held on November 23, 2011, again in Anchorage, Alaska. Both Ms. Christensen and Mr. Berry appeared and testified. The record closed at the hearing's conclusion on November 23, 2011. ISSUES The Division contends Trophy operated a business utilizing employee labor without filing proof of workers' compensation insurance and without workers' compensation insurance. The Division also contends that Randall Berry, as president of Trophy, and Beth Hayward-Berry, as secretary/treasurer of Trophy, should be personally liable for benefits if any employees have been injured while Trophy was uninsured. The Division further contends a civil penalty should be assessed against Trophy. Trophy does not dispute that it utilized employee labor while uninsured, but contends mitigating factors should be considered in any civil penalty assessed. 1. Did Trophy fail to file proof of workers' compensation liability? 2. Did Trophy fail to provide workers' compensation insurance? 3. Should Mr. Berry, as Trophy's president, and Ms. Hayward-Berry, as secretary/treasurer be held personally liable for benefits while Trophy was uninsured? 4. Should Trophy be assessed a civil penalty for its failure to insure? FINDINGS OF FACT Based on the record as a whole, the following facts and factual conclusions are established by a preponderance of the evidence: 1) Trophy is an Alaska corporation formed March 27, 1998. (State of Alaska Business, Corporations and Professional Licensing printout). Trophy's 2010 Biennial Report lists Randall Berry as president and Beth Hayward-Berry as Secretary/Treasurer. (2010 Biennial Report). 2) The Berrys, husband and wife, purchased Trophy on May 25, 2006. (Berry). 3) The bulk of Trophy's business consists of custom awards and engraving and custom art framing. (Berry). 4) After a routine records check through National Council on Compensation Insurance (NCCI), on October 6, 2009 the Division sent Trophy a letter asking that Trophy confirm it had workers' compensation coverage. No response was received. (Christensen). 5) On October 5, 2010, the Division conducted an on-site visit. Mr. Berry said he believed the business had workers' compensation coverage but would contact the broker and have proof of coverage sent to the Division. (Christensen). Mr. Berry explained he thought workers' compensation coverage was included in Trophy's other insurance. (Berry). 6) No proof of insurance was provided, and on October 28, 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 Trophy by certified mail. (Affidavit of Service). Trophy received the petition and discovery demand on October 29, 2010. (U.S. Postal Service Track and Confirm Print-Out). 7) Although the petition asserted that Trophy had been uninsured since July 7, 2007, the cover letter and discovery demand both state that Trophy's coverage lapsed July 28, 2007. (Petition, October 28, 2010; Letter from Christensen to Trophy, October 28, 2010; Discovery Demand, October 28, 2010). The Division presented no evidence Trophy was uninsured prior to July 28, 2007. (Record). 8) After receiving no response, the Division again contacted Trophy on December 9, 2010. Mr. Berry again stated there was coverage in place and he would provide proof the next day. (Christensen). 9) Because it had not received evidence that Trophy had acquired insurance, on January 18, 2011, the Division contacted Trophy and spoke with Mr. Berry about the possibility of a stop-work order. Mr. Berry said Trophy would have coverage by the close of business on January 19, 2011. (Christensen). 10) On January 19, 2011, Division spoke with Trophy's insurance broker. The broker stated that Trophy had completed the application but had not yet made payment. (Christensen). 11) On February 4, 2011 Division again contacted the insurance broker and learned that payment still had not yet been made and the insurer was now requesting additional paperwork. (Christensen). 12) On February 8, 2011, the Division contacted Mr. Berry regarding the policy. He had completed the required paperwork and was going to make payment the following day. (Christensen). 13) On February 16, 2011, the Division again contacted the insurance broker, who stated that the insurer was requiring payment of the entire annual premium up-front, and payment had not yet been made. (Christensen). 14) The Division requested a stop-work order, which was issued by the director on February 22, 2011. On February 26, 2011, before the order was served, Trophy paid the premium for the insurance policy. (Christensen). 15) Trophy provided its responses to the Division's discovery requests on April 22, 2011. (Christensen). 16) On August 15, 2011, NCCI records indicated Trophy's policy would be canceled on August 21, 2011. The Division contacted Trophy's broker, who explained the cancellation was because an executive officer waiver had never been completed. Mr. Berry told Ms. Christensen he had completed the waiver and sent it to the Board's office. (Christensen). 17) On August 30, 2011, Trophy's insurance broker confirmed it had received the waiver had sent it to the insurer. The policy was reinstated on September 9, 2011, but the reason for the delay is not clear from the record. (Christensen). ...
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