12-0055. IN THE MATTER OF THE PETITION FOR FINDING OF FAILURE TO INSURE FOR WORKERS' COMPENSATION LIABILITY AND FOR ASSESSMENT OF A CIVIL PENALTY AGAINST HOMER SAW and CYCLE ROBERT E. SCHMUTZLER and CLAIRE WAXMAN Uninsured Employer Respondents.
Court | Alaska |
Alaska Workers Compensation Decisions
2012.
Workers' Compensation Board
12-0055.
IN THE MATTER OF THE PETITION FOR FINDING OF FAILURE TO INSURE FOR WORKERS' COMPENSATION LIABILITY AND FOR ASSESSMENT OF A CIVIL PENALTY AGAINST HOMER SAW and CYCLE ROBERT E. SCHMUTZLER and CLAIRE WAXMAN 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 HOMER SAW and CYCLE, ROBERT E.
SCHMUTZLER, and CLAIRE WAXMAN, Uninsured Employer Respondents FINAL DECISION AND ORDERAWCB
Decision No. 12-0055Filed with AWCB Anchorage,
Alaska on March 14, 2012AWCB Case No. 700003342This petition for a finding of failure to insure for workers'
compensation liability and for civil penalty was heard in Anchorage, Alaska on
February 15, 2012. 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. Claire Waxman appeared on behalf of Homer
Saw and Cycle and testified. The record closed at the hearing's conclusion on
February 15, 2012.
ISSUES
The Division contends Homer Saw and Cycle operated a business
utilizing employee labor without filing proof of compliance with workers'
compensation laws and without providing workers' compensation insurance. The
Division also contends that Robert E. Schmutzler and Ms. Waxman, as partners in
Homer Saw and Cycle, should be personally liable for benefits to any employees
injured while Homer Saw and Cycle was uninsured as well as any penalties that
may be assessed against Homer Saw and Cycle. The Division further contends a
civil penalty should be assessed against Homer Saw and Cycle.
Homer Saw and Cycle does not dispute these contentions but asks
that mitigating factors be considered in assessing a penalty.
1. Did Homer Saw and Cycle fail to file proof of compliance
with workers' compensation laws?
2. Did Homer Saw and Cycle fail to provide workers'
compensation insurance?
3. Should Homer Saw and Cycle be assessed a civil penalty for
its failure to insure?
4. Should Mr. Schmutzler and Ms. Waxman, as partners in Homer
Saw and Cycle be held personally liable for benefits for injuries sustained
while Homer Saw and Cycle was uninsured, and for any penalty assessed?
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) Homer Saw and Cycle is a partnership between Mr. Schmutzler
and Ms. Waxman, who are husband and wife. It has been in business since 1987.
(Waxman).
2) Homer Saw and Cycle operates in Homer, Alaska, selling
snowmobiles, ATVs, outdoor power equipment and apparel. (Waxman).
3) Homer Saw and Cycle came to the Division's attention in May
2010 when a routine records check suggested it might not have worker's
compensation coverage. (Christensen). Insurance company records indicated that
Homer Saw and Cycle's had been cancelled on July 7, 2009 for failing to report
information for a test audit. (Notice of Cancellation, May 5, 2009).
4) On June 2010, an investigator for the Division made an
onsite visit and spoke to Mr. Schmutzler. Mr. Schmutzler told the investigator
that Ms. Waxman, who maintained the books, had been diagnosed with cancer and
was undergoing treatment. (Christensen). Ms. Waxman credibly testified that the
lapse was unintentional and occurred because of her illness led to a lack of
attention to the business. (Waxman).
5) On May 26, 2011, the Division mailed Homer Saw and Cycle a
petition for failure to insure and for assessment of civil penalties and a
discovery demand. (Affidavit of Service, May 26, 2011). The petition alleges
Homer Saw and Cycle became uninsured on July 7, 2009. (Petition, May 26, 2011).
Homer Saw and Cycle received the petition and discovery demand on May 27, 2011.
(USPS Track and Confirm print-out).
6) Homer Saw and Cycle reacquired workers' compensation
coverage on June 11, 2011. The estimated annual premium for the policy is
$2,146.00 (Christensen; Liberty Northwest Insurance policy).
7) When no response to either the petition or discovery demand
was received, the Division sent Homer Saw and Cycle a follow-up letter on July
19, 2011. (Christensen).
8) The Division received Homer Saw and Cycle's discovery
responses on July 25, 2011. (Christensen).
9) Homer Saw and Cycle's payroll information showed that from
July 7, 2009 through June 10, 2011 it had four employees who accrued a total of
554 uninsured workdays. (Employer Worksheet, payroll information, Christensen).
One of the employees is a permanent long-term employee, another is Mr.
Schmutzler's and Ms. Waxman's son. The other two employees were friends that
helped while Ms. Waxman was ill. (Waxman).
10) Subsequent investigation revealed that Homer Saw and
Cycle's insurance had lapsed on four occasions prior to July 7, 2009. The
lapses were relatively short, and the Division is not seeking penalties for
those lapses. (Christensen).
11) Homer Saw and Cycle has had one reported injury, which
occurred while it was insured. (Christensen). Ms. Waxman explained that while
the injury was reported as a work injury, Homer Saw and Cycle later learned
that the individual had actually been injured while fishing.
12) This is the first case against Homer Saw and Cycle for
failure to insure. (Christensen, Record).
13) The estimated annual premium for the June 11, 2011 policy
of $2,146.00 equates to an approximate daily cost to insure of $5.88, or
$4,139.13 for the 704 calendar days Homer Saw and Cycle was uninsured.
(Observation).
14) Homer Saw and Cycle's average ordinary business income for
2009 and 2010 was $2,494.50. (Form 1065, 2009 and 2010; observation).
15) As a result of her illness, Ms. Waxman incurred nearly
$200,000.00 in medical bills, most of which have...
To continue reading
Request your trial