Submitted: April 4, 2017
Employer Appellant appeals from a decision of agency Appellee
ordering him to pay to the Uninsured Employers' Fund a
penalty under § 39-71-504(1)(a), MCA, in the amount of
$28, 259.82. Appellant argues the penalty is not supported by
sufficient evidence in the record.
There is sufficient evidence in the record to support
Appellee's imposition of a $28, 259.82 penalty under
§ 39-71-504(1)(a), MCA. Appellee's final agency
order imposing the penalty is affirmed.
ORDER AFFIRMING PENALTY UNDER § 39-71-504(1)(A),
M. SANDLER, JUDGE
1 Appellant Bart Crabtree, d/b/a Lodestar Builders
(Crabtree), appeals from a decision of Appellee Department of
Labor & Industry (Department) ordering him to pay a
penalty of $28, 259.82 to the Uninsured Employers' Fund
AND PROCEDURAL HISTORY
2 On January 26, 2016, the UEF notified Crabtree that it
received information he employed workers in his construction
business without carrying the requisite workers'
compensation insurance coverage for them. The UEF notified
Crabtree that he could be assessed a penalty for such
non-compliance and initiated a workers' compensation
audit. On February 25, 2016, the UEF sent Crabtree a second
3 On March 18, 2016, the UEF Investigator Sarah Elledge, in
connection with the audit, issued a subpoena duces
tecum to Crabtree requesting he produce business and
employee records. The subpoena duces tecum was
served on Crabtree March 30, 2016. Crabtree did not comply
with the subpoena.
4 On April 25, 2016, Elledge notified Crabtree of the
UEF's penalty calculation of $28, 259.82, based on an
estimated payroll of $81, 688.01. Elledge notified Crabtree
that if he disagreed with the penalty, he would need to
comply with the audit of his business books and records.
Crabtree failed to produce all of the documentation requested
for the audit.
5 On May 18, 2016, an official penalty determination was
assessed against Crabtree in the amount of $28, 259.82 for
not providing workers' compensation coverage for its
employees from October 1, 2014, to March 31, 2016. Crabtree
requested an administrative review on June 17, 2016.
6 On June 20, 2016, the UEF issued a redetermination that
Crabtree owed a penalty of $28, 259.82. On July 20, 2016,
Crabtree filed an appeal of the Redetermination and requested
a contested case hearing. A Notice of Hearing was issued July
7 On August 4, 2016, the Department served Crabtree with its
first discovery requests, which included Requests for
Admission, Requests for Production, and Interrogatories.
8 On August 8, 2016, the Office of Administrative Hearings
(OAH) issued a Scheduling Order informing the parties that
"[a] party's failure to appear for any conference,
and/or failure to obey orders issued by the Hearing Officer,
may result in sanctions against that party that can include
entry of default, dismissal of an appeal, imposition of
liability or other appropriate sanctions."
9 Crabtree did not respond to the discovery requests and did
not appear at a scheduled telephone conference. The
Department filed a Motion to Compel on September 13, 2016.
The Brief Supporting UEF Motion to Compel noted that a
failure to respond to Requests for Admission deemed them
admitted. Crabtree did not respond to the motion.
10 Hearing Officer David Evans issued an order on October 11,
2016, compelling Crabtree to respond to the Department's
Requests, no later than October 24, 2016. The order noted
that Crabtree had "not respond[ed] to OAH staff's
11 On October 24, 2016, Crabtree provided responses, but
failed to produce all of the requested records, including his
tax returns, and failed to explain the basis for his ...