12-0066. IN THE MATTER OF THE PETITION FOR A FINDING OF THE FAILURE TO INSURE WORKERS' COMPENSATION LIABILITY AND ASSESSMENT OF A CIVIL PENALTY AGAINST EVERYBODY RIDES; WILLIAM C. WORTHAM; CARLTON DALE WORTHAM; AND ROBYN R. WORTHAM Uninsured Employers Respondents.

• Court: Alaska

Alaska Workers Compensation Decisions 2012. Workers' Compensation Board 12-0066. IN THE MATTER OF THE PETITION FOR A FINDING OF THE FAILURE TO INSURE WORKERS' COMPENSATION LIABILITY AND ASSESSMENT OF A CIVIL PENALTY AGAINST EVERYBODY RIDES; WILLIAM C. WORTHAM; CARLTON DALE WORTHAM; AND ROBYN R. WORTHAM Uninsured Employers Respondents 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, EVERYBODY RIDES; WILLIAM C. WORTHAM; CARLTON DALE WORTHAM; AND ROBYN R. WORTHAM, Uninsured Employers, Respondents.FINAL DECISION AND ORDERAWCB Decision No. 12-0066Filed with AWCB Anchorage, Alaskaon April 2, 2012AWCB Case Nos. 700003241The Petition for Finding of Failure to Insure and Assessment of Civil Penalties against Everybody Rides, William C. Wortham, Carlton Dale Wortham, and Robyn Wortham was heard on November 22, 2011, in Anchorage, Alaska. Rhonda Gerharz, Investigator for the Special Inves-ligations Unit of the Workers' Compensation Division (the Division), Alaska Department of Labor and Workforce Development (DOL), testified and represented the State of Alaska. William C. Wortham appeared and testified. Carlton Dale Wortham and Robyn Wortham did not appear. The record was held open until January 4, 2012, to allow the filing of additional evidence. The record closed on March 28, 2012, after further deliberation. ISSUES The Division contends Carlton Dale Wortham (Employer) and Robyn Wortham were properly noticed with the hearing's date, time and place. It contends since Carlton Dale Wortham and Robyn Wortham failed to appear without any justification, the hearing should go forward. William C. Wortham contends Carlton Dale Wortham was diagnosed in August 2011 with end stage liver failure and therefore was unable to participate in any and all hearings. Robyn Wortham did not appear or participate telephonically so the reason she failed to appear is unknown. 1) Was the decision to proceed in Carlton Dale Wortham and Robyn Wortham's absence proper? The Division contends Employer operated a business using employee labor when not insured for workers' compensation liability, and should be assessed a civil penalty for its failure to insure. William C. Wortham contends he and Robyn Wortham had no ownership interest in the business at the time of the failure to insure and consequently contends no penalty should be assessed against them. 2) Was Everybody Rides, William C. Wortham, Carlton Dale Wortham, and/or Robyn Wortham subject to AS 23.30.085(a)-(b)'s requirement to file evidence of compliance with workers' compensation insurance law during the relevant periods? 3) Was Everybody Rides, William C. Wortham, Carlton Dale Wortham, and/or Robyn Wortham subject to AS 23.30.075 and the requirements and penalties in AS 23.30.080 during the relevant periods? 4) Shall Everybody Rides, William C. Wortham, Carlton Dale Wortham, and/or Robyn Wortham be assessed a civil penalty for failure to insure, 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: 0) In May 2004, William C. Wortham transferred the business Everybody Rides to his son, Carlton Dale Wortham. (Notice of Filing Additional Evidence at Exhibits 2-4, January 4, 2012). 1) Carlton Dale Wortham operated as a sole proprietor, and was the sole owner of, Everybody Rides from May 2004 to September 1, 2011. (Id.; see also Notice of Evidence to be Introduced at Hearing at Exhibits 5, 17-19, November 2, 2011). 2) Everybody Rides' business is selling used vehicles in Soldotna, Alaska. (Id. at 2). 3) On May 4, 2009, the Division was notified an employee had been injured on April 8, 2008 while working for Employer. (Samskar v. Everybody Rides, Alaska Workers' Comp. Bd. Dec. No. 11-0038 at 3 (April 7, 2011) (Samskar)). 4) On February 28, 2010, 8 AAC 45.176 setting civil penalty guidelines in uninsured employer cases became effective. (Experience, observations, official notice). 5) On June 1, 2010, Employer was served with the Division's May 28, 2010 Petition for Finding of Failure to Insure Workers' Compensation Liability and for Assessment of Civil Penalty under AS 23.30.080 (Petition). (Petition, May 28, 2010; Track and Confirm Search Results, USPS certified mail, Label/Receipt Number: 7006 3450 0000 3763 9490). 6) The Petition included a discovery demand. The discovery demand notified Employer it was required to provide proof of insurance, timecards, timesheets, payroll summaries, or any other documentation showing the number of hours and days worked by any employee from November 7, 2005, to the date Employer became insured, in addition to the names, addresses, telephone 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. (Discovery Demand, May 28, 2010). 7) On June 30, 2010, Employer requested an extension of the discovery deadline. The Division granted an extension until July 15, 2010. Employer responded to the initial discovery demand on July 15, 2010. (Email from Employer to the Division, June 30, 2010; Email from the Division to Employer, July 1, 2010; Gerharz). 8) On November 8, 2010, Employer was served with the Division's November 4, 2010, Amended Petition for Finding of Failure to Insure Workers' Compensation Liability and for Assessment of Civil Penalty under AS 23.30.080 (Amended Petition). (Amended Petition, November 4, 2010; Track and Confirm Search Results, USPS certified mail, Label/Receipt Number: 7006 3450 0000 3763 9988). 9) The Petition included an amended discovery demand. The amended discovery demand notified Employer it was required to provide additional discovery, including information relating to work and services performed by or for Everybody Rides since November 7, 2005. Employer was directed to provide the information within 30 calendar days of the date of service. (Discovery Demand, November 4, 2010). 10) Employer failed to comply with the Division's amended discovery demand. (Record; Gerharz). 11) On June 16, 2011, a prehearing conference was held to schedule a hearing on the Division's Amended Petition. A hearing was scheduled for November 22, 2011. Carlton Dale Wortham participated by telephone. (Prehearing Conference Summary, June 16, 2011). 12) On October 25, 2011, Carlton Dale Wortham was served with notice of the November 22, 2011 hearing. (USPS certified mail green card, Label/Receipt Number: 7010 2780 0000 6496 5627). 13) On October 25, 2011, Robyn Wortham was served with notice of the November 22, 2011 hearing. (USPS certified mail green card, Label/Receipt Number: 7010 2780 0000 6496 5580). 14) Carlton Dale Wortham had actual notice of the November 22, 2011 hearing but failed to appear. (Prehearing Conference Summary, June 16, 2011; Record). 15) Carlton Dale Wortham has a history of failing to accept certified mail. (Record). 16) William C. Wortham contends Carlton Dale Wortham was diagnosed in August 2011 with end stage liver failure and therefore was unable to participate in any and all hearings. (Employer Hearing Exhibit 1). 17) Carlton Dale Wortham did not contact the board regarding his inability to participate in board hearings nor submit any evidence he was unable to participate in board hearings. He did not request a continuance for any reason. (Record). 18) Robyn Wortham did not request a continuance of the November 22, 2011 hearing. (Record). 19) On September 1, 2011, Carlton Dale Wortham d/b/a Everybody Rides sold the business to Duane Bannock for $602,112.61. (Employer's Hearing Exhibit 2). 20) On November 22, 2011, a hearing on the Division's Amended Petition was held. Carlton Dale Wortham and Robyn Wortham did not attend the hearing. (Record). 21) Carlton Dale Wortham d/b/a Everybody Rides has never insured for workers' compensation liability. (Gerharz; National Council on Compensation Insurance (NCCI), Proof of Coverage Search, Everybody Rides; NCCI, Policy and Coverage Provider Information, Everybody Rides; NCCI, Cancellations/Reinstatements/Non-Renewals Information, Everybody Rides (collectively "Everybody Rides NCCI Records")). 22) Carlton Dale Wortham d/b/a Everybody Rides was an "employer," using employee labor, and had neither workers' compensation insurance to pay workers' compensation benefits if an employee was injured on the job, nor approval to self-insure. (Record). 23) Carlton Dale Wortham was the person actively in charge of the business of Everybody Rides during the periods Employer was uninsured. (Notice of Filing Additional Evidence at Exhibits 2-4, January 4, 2012; Notice...