12-0053. IN THE MATTER OF THE PETITION FOR A FINDING OF THE FAILURE TO INSURE WORKERS' COMPENSATION LIABILITY AND ASSESSMENT OF A CIVIL PENALTY AGAINST LIVINGREEN SERVICES INC. Uninsured Employer Respondent.

• Court: Alaska

Alaska Workers Compensation Decisions 2012. Workers' Compensation Board 12-0053. IN THE MATTER OF THE PETITION FOR A FINDING OF THE FAILURE TO INSURE WORKERS' COMPENSATION LIABILITY AND ASSESSMENT OF A CIVIL PENALTY AGAINST LIVINGREEN SERVICES INC. Uninsured Employer Respondent ALASKA WORKERS' COMPENSATION BOARD IN THE MATTER OF THE PETITION FOR A FINDING OF THE FAILURE TO INSURE WORKERS' COMPENSATION LIABILITY AND ASSESSMENT OF A CIVIL PENALTY AGAINST, LIVINGREEN SERVICES, INC., Uninsured Employer, Respondent.FINAL DECISION AND ORDERAWCB Decision No. 12-0053Filed with AWCB Anchorage, Alaskaon March 14, 2012AWCB Case No. 700003672The petition for a finding of failure to insure for workers' compensation liability, and for civil penalty assessment, was heard on February 8, 2012, in Anchorage, Alaska. William Brehm appeared, testified, and represented Livingreen Services, Inc. (Employer). Rhonda Gerharz, Special Investigations Unit of the Alaska Department of Labor and Workforce Development, appeared, represented the State of Alaska (the division), and testified. The record was held open until February 24, 2012, to allow Employer to file additional documentation. The record closed on March 1, 2012, after further deliberation. ISSUES The division contends Employer was operating a business using employee labor when not insured for workers' compensation liability and failed to provide proof of workers' compensation liability coverage, specifically for the periods July 9, 2008 to July 11, 2008; November 14, 2008 to April 24, 2009; November 26, 2009 to June 30, 2010; and April 13, 2011 to June 1, 2011. Employer does not dispute these contentions but asks for mitigating factors to be considered in any civil penalty assessment. 1) Was Employer from July 9, 2008, to July 11, 2008; November 14, 2008 to April 24, 2009; November 26, 2009 to June 30, 2010; and April 13, 2011 to June 1, 2011, subject to and in violation of AS 23.30.085(a) and (b)'s requirement to file evidence of compliance with workers' compensation insurance law? 2) Was Employer from July 9, 2008 to July 11, 2008; November 14, 2008 to April 24, 2009; November 26, 2009 to June 30, 2010; and April 13, 2011 to June 1, 2011, subject to and in violation of AS 23.30.075 and subject to the requirements and penalties in AS 23.30.080? 3) Shall Employer be assessed a civil penalty for its failure to insure from July 9, 2008 to July 11, 2008; November 14, 2008 to April 24, 2009; November 26, 2009 to June 30, 2010; and April 13, 2011 to June 1, 2011, and if so, in what amount? FINDINGS OF FACTS A review of the entire record establishes the following facts and factual conclusions by a preponderance of the evidence: 1) In November 2002, Livingreen Services, Inc. was incorporated. (Petitioner's Notice of Evidence to be Introduced at Hearing, Exhibit 2, January 18, 2012; Petitioner's Hearing Evidence). 2) In October 2004, William Brehm took over ownership and operations of Livingreen Services, Inc. (Brehm). 3) On April 29, 2009, April Brehm became an officer of the corporation, serving as Vice-President, Secretary and Director. (Brehm; Gerharz; Petitioner's Hearing Evidence at Exh. 2). 4) Livingreen Services, Inc. is a corporation, with William Brehm holding 100 percent ownership and serving as President, Treasurer and Director. (Petitioner's Hearing Evidence at Exh. 2). 5) William Brehm has had an executive officer waiver on file with the Alaska Department of Labor since January 2003. (Id. at Exh. 10). 6) On February 28, 2010, 8 AAC 45.176 setting civil penalty guidelines in uninsured employer cases became effective. (Experience, observations). 7) On May 23, 2011, the division contacted Employer regarding a March 15, 2011 report of injury and informed Employer its workers' compensation liability insurance had been cancelled on April 13, 2011, for non-payment of premium. (Gerharz; Uninsured Employer Investigation Summary, February 1, 2012). 8) On June 1, 2011, Employer reinstated its workers' compensation liability insurance. Its current policy is in effect until June 30, 2012. (Petitioner's Hearing Evidence at Exh. 5). 9) On July 8, 2011, the division served on Employer a petition for a finding of failure to insure for workers' compensation liability from July 9, 2008 to July 11, 2008; November 14, 2008 to April 24, 2009; November 26, 2009 to June 30, 2010; and April 13, 2011 to June 1, 2011, pursuant to AS 23.30.075, and for assessment of a civil penalty under AS 23.30.080. (Petition, July 6, 2011; Petitioner's Hearing Evidence at Exh. 3). 10) The Petition included a discovery demand, which notified Employer it was required to provide proof of insurance, copies of timecards, timesheets, work schedules, and any other documentation showing the number of hours and days worked by any employee from July 9, 2008 to July 11, 2008; November 14, 2008 to April 24, 2009; November 26, 2009 to June 30, 2010; and April 13, 2011 to June 1, 2011, in addition to the names, addresses, phone numbers and occupation of each person employed during those dates. Employer was directed to provide the information within 30 calendar days of the date of service of the discovery demand. (Discovery Demand, July 6, 2011). 11) Employer did not timely respond to the division's discovery request. The division filed its discovery demand on July 6, 2011, and Employer received the division's discovery demand on July 8, 2011. Employer was required to comply by August 8, 2011. Employer did not contact the division until August 9, 2011, despite the division's numerous telephone calls and emails to Employer encouraging Employer to contact the division, provide discovery or request an extension before the discovery deadline passed. The division also informed Employer of the consequences of its failure to comply by the August 8, 2011 deadline, including increased penalties. Employer did not provide the requested discovery until October 12, 2011, significantly more than 30 days after the division's demand. (Gerharz; Brehm; Uninsured Employer Investigation Summary; Petitioner's Hearing Evidence at Exh. 4). 12) On August 9, 2011, Employer contacted the division and requested a discovery deadline extension so its attorney could enter an appearance and address the division's petition. This request came after the deadline had already passed. The division informed Employer it would consider granting an extension if Employer's counsel filed an entry of appearance. (Gerharz; Uninsured Employer Investigation Summary; Petitioner's Hearing Evidence at Exh. 4). 13) On August 22, 2011, because Employer had not contacted the division since August 9, 2011, nor had its attorney entered an appearance in the case, the division informed Employer it would not grant a discovery deadline extension. (Gerharz; Uninsured Employer Investigation Summary; Petitioner's Hearing Evidence at Exh. 4). 14) On September 29, 2011, attorney Nora Barlow entered an appearance as Employer's counsel in this case. (Entry of Appearance, September 29, 2011). 15) On January 4, 2012, Employer's greenhouse collapsed, costing Employer $30,517.01 to repair. (Brehm; Employer's Hearing Exhibit 1; Employer's Supplemental Evidence, February 24, 2012). 16) On January 24, 2012, Nora Barlow withdrew as Employer's counsel in this case. (Notice of Withdrawal of Attorney, January 24, 2012). 17) The nature of Employer's business is landscape management. This includes during the summer months cutting, trimming and watering grass, trimming bushes, applying fertilizer, flower planting and maintenance, and installing plastic edging and mulching of landscaped bed areas. During the winter months, Employer puts decorative lights on trees, homes and businesses and provides snow and ice management. (Brehm; Statement of Bill Brehm, January 18, 2012). 18) Employer failed to provide evidence of compliance with workers' compensation insurance requirements from July 9, 2008 to July 11, 2008; November 14, 2008 to April 24, 2009; November 26, 2009 to June 30, 2010; and April 13, 2011 to June 1, 2011. Employer acknowledged it was uninsured during these periods. (Uninsured Employer Investigation Summary; Brehm; Statement of Bill Brehm). 19) Employer acknowledged at hearing it employed one or more people in the course of doing business. (Brehm). 20) Employer used employee labor without workers' compensation insurance from July 9, 2008 to July 11, 2008; November 14, 2008 to April 24, 2009; November 26, 2009 to June 30, 2010; and April 13, 2011 to June 1, 2011. (Gerharz; Uninsured Employer Investigation Summary; Brehm; Statement of Bill Brehm). 21) Employer's reasons for its failure to insure include it did not understand workers' compensation insurance was required by law (all lapses), it failed to comply with its insurance carrier's requests for audit information because the requests came during its busy summer season (July 9, 2008 to July 11, 2008 lapse), the business grew significantly in 2008 and Employer was overwhelmed and unable to keep up with its paperwork (November 14, 2008 to April 24, 2009 lapse), its insurance carrier's requests for audit information were sent to Employer at an incorrect address and Employer did not receive the requests for information until the spring (November 26, 2009 to June 30, 2010 lapse), and it did not have the money to pay the increased premium following an audit and so did not pay it; Employer disagreed with the premium calculation because it did not take into account the seasonal...