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Inc. v. American Residuals and Talent, Inc.

Florida Court of Appeals, First District

April 30, 2018

Florida Workers' Compensation Joint Underwriting Association, Inc., Appellant,
v.
American Residuals and Talent, Inc., d/b/a Art Payroll, Appellee.

         Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

          On appeal from an Order of the Office of Insurance Regulation. David Altmaier, Commissioner.

          Thomas J. Maida, James A. McKee, Benjamin J. Grossman, and Nicholas R. Paquette of Foley & Lardner LLP, Tallahassee, for Appellant.

          Fred F. Harris, Jr., David C. Ashburn, and M. Hope Keating of Greenberg Traurig, P.A., Tallahassee, for Appellee.

          WINOKUR, J.

         Appellant, Florida Workers' Compensation Joint Underwriting Association, Inc. (FWCJUA), appeals a Final Order of the Office of Insurance Regulation (OIR) reversing FWCJUA's denial of workers' compensation coverage to Appellee, American Residuals and Talent, Inc. (ART). We affirm, but write to address FWCJUA's claim that ART is not an employer under Florida law.

         I.

         FWCJUA is a self-funding, residual-market insurer created by the Legislature in order to provide workers' compensation insurance to employers who are statutorily required to maintain such insurance, but who are unable to obtain coverage from private insurers in the voluntary market. § 627.311(5)(a), Fla. Stat. FWCJUA operates under the supervision of a nine-member Board of Governors appointed by the Financial Services Commission. § 627.311(5)(b), Fla. Stat. Additionally, FWCJUA operates in accordance with a plan of operation adopted by the Board of Governors and approved by OIR. § 627.311(5)(c), Fla. Stat.

         ART is a New Hampshire corporation authorized to do business in Florida. ART specializes in talent payroll services for the motion picture, television, and radio commercial production industry. ART provides payroll and employer of record services to clients in the advertisement and entertainment business for short-term productions, such as paying wages to the talent, obtaining and covering the talent for state unemployment compensation and workers' compensation coverage for each production based on the location where the production is being filmed or produced, and withholding, paying, and remitting taxes due from the talent's compensation, as well as filing state and federal tax returns for the talent and providing W-2s to the talent.

         ART first obtained workers' compensation coverage from FWCJUA in 2002. After initially representing in its application for coverage that it did not hire any of the employees for which it sought coverage, ART subsequently changed its representation in an August 2002 letter, stating that it entered into employment contracts with workers and was a temporary employment service. ART maintained coverage through FWCJUA until 2004. From 2005 through 2012, ART obtained workers' compensation coverage through the private market. In 2012, ART was unable to maintain coverage in the private market and reapplied for workers' compensation coverage through FWCJUA. In its application, ART described itself as a temporary employment service. FWCJUA issued ART a coverage policy effective September 2012.

         In late 2014, FWCJUA received an application for workers' compensation insurance from Stars of David Tours, LLC (Stars of David). Stars of David is headquartered in New York and intended to bring its actors and staff into Florida for a travelling theatrical performance. Stars of David was unable to obtain coverage through FWCJUA, so it contracted with ART to provide workers' compensation insurance coverage until it could get its own through FWCJUA. FWCJUA requested a copy of the Talent Payroll Support Agreement that Stars of David had with ART and determined that ART was an unlicensed employee leasing company. FWCJUA then terminated ART's workers' compensation coverage and filed a complaint with the Florida Division of Business and Professional Regulation (DBPR).

         DBPR found insufficient evidence to establish probable cause that ART operated as an unlicensed employee leasing company and dismissed FWCJUA's complaint. After DBPR closed its investigation, ART reapplied to FWCJUA for coverage. FWCJUA, however, again refused to issue ART workers' compensation coverage and initiated another complaint to DBPR claiming that ART was an unlicensed employee leasing company. DBPR once again found insufficient evidence to establish probable cause that ART operated as an unlicensed employee leasing company.

         In January 2016, FWCJUA again denied coverage to ART, concluding that ART did not have any direct employees and, as a result, was not an employer under Florida law. Thus, ART was not eligible for coverage through FWCJUA. ART appealed FWCJUA's eligibility determination to OIR. Representatives for FWCJUA and ART testified during the OIR hearing.

         In February 2017, OIR issued its Written Report and Recommendation reversing FWCJUA's denial of workers' compensation coverage to ART. OIR found that ART, while not an employee leasing company, is an employer under Florida law, because it is a "similar agent" under section 440.02(16)(a), Florida Statutes. Additionally, OIR concluded that "the obligation of the Production companies for the provision of workers' compensation coverage is contractually transferred to ART by virtue of the Talent Payroll ...


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