OSHRC ALJ decision Docket 20-1029, 20-1030, 20-1031, 20-1032, 20-1042 Decided April 7, 2022 Citations affirmed Judge William S. Coleman

Juan G. Quevedo-Garcia

Corporate veil pierced for OSHA penalties

Apply this to your situation

This order from 2022 bound only the parties to this case; it isn't precedent. Ezel answers your situation under the current OSHA standards and Commission precedent, with citations.

Final order, not Commission precedent

This decision by an OSHRC Administrative Law Judge became a final order of the Commission because no Commissioner directed review (29 U.S.C. § 661(j)). It binds the parties in this case but is not binding precedent in other cases.

About this page: The plain-English summary and decision snapshot below were written by Ezel based on the official OSHRC release. The full text is the Commission's own document.

Read the official release (oshrc.gov)

Plain-English summary

Five consolidated cases involved 33 construction violations issued to BB Frame LLC and its owner, Juan G. Quevedo-Garcia, including serious, repeat, and willful violations involving fall protection, eye and head protection, and stairways and ladders. BB Frame withdrew its contests, leaving only whether Quevedo-Garcia could be held personally liable for the company's violations and penalties. On cross-motions for summary judgment, the judge found clear and convincing evidence that BB Frame did not operate separately from Quevedo-Garcia and that he abused its corporate form to evade OSHA enforcement, including by commingling finances, transferring funds among related entities, dissolving companies, and misrepresenting which company performed the work. The corporate veil was pierced, all five citations were affirmed against Quevedo-Garcia, and penalties totaling $2,004,225 were assessed.

Decision snapshot

Cited standard(s): The decision specifically identifies recurring violations of 29 C.F.R. §§ 1926.501(b)(13), 1926.102(a)(1), and 1926.100(a), along with additional Part 1926 stairway, ladder, and construction violations.
Outcome: All five citations affirmed against Quevedo-Garcia personally; total penalties of $2,004,225 assessed.
Key point: An individual owner may be personally liable for corporate OSHA violations when clear and convincing evidence supports disregarding a company used to circumvent the Act and frustrate penalty collection.

Full text (OSHRC public release)

Document

United States of America

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

1120 20th Street, N.W., Ninth Floor

Washington, DC 20036-3457

SECRETARY OF LABOR,

Complainant,

OSHRC DOCKET N os.
20-1029, 20-1030,
20-1031, 20-1032, &
20-1042

JUAN
G.
QUEVEDO - GARCIA ,

Respondent .

APPEARANCES:

For the Complainant:

Alexander M. Kondo, Senior Trial Attorney

B. Carina De La Paz,
Trial Attorney

U.S. Department of Labor

New York City,
New York

For the Respondent:

Richard P.
Galler, Esquire

Hackensack, New Jersey

BEFORE:
William S. Coleman

U. S.
Administrative Law Judge

DECISION AND ORDER

The
parties have filed
cross-motions for summary judgment on the sole
issue
remaining
to be decided, which may be
stated as follows:

Issue :
Does
a
genuine dispute of
material
fact
exist
on
whether
the
evidence
does, or
does not,
constitute
“clear and convincing evidence”
to
hold the Respondent,
Mr.
Quevedo-Garcia,
personally liable for
OSHA
violations and penalties
that have been
assessed against
his
closelyheld company
(BB Frame LLC)
by
piercing
the
corporate veil
of that company?

Decision :
The
whole of the evidence on the cross-motions
permits only one
reasonable conclusion––that
the evidence is clear and convincing that
BB Frame LLC
has not operated as an entity
separate from
Quevedo-Garcia
and
that he
has
abused
the company’s
corporate form to circumvent
the Occupational Safety and Health Act of 1970 (Act or OSH Act) and
avoid
the
Act’s
expressed
purpose
and policy.

The Secretary is
therefore
entitled to judgment as a matter of law that the
company’s
corporate form should be disregarded to
hold
Quevedo-Garcia
personally
liable
for
the
company’s
OSHA violations and penalties.

Accordingly, as set forth below,
the Respondent’s motion for summary judgment is denied, and the
Secretary’s
cross-motion for summary judgment is granted.

F ACTS
( Of
W hich No Genuine Dispute
Has Been
Shown )

The
evidentiary
material
considered
on the cross-motions
for summary judgment
reflects
no
genuine dispute
as to the following
facts:

Quevedo-Garcia and Related
Closely-Held
Companies

The Respondent,
Mr.
Juan G. Quevedo Garcia (Quevedo-Garcia
or Respondent),
is an individual whose primary residence is
[redacted], Palisades Park, New Jersey (Quevedo-Garcia
Residence).

(Exs. 1
& 4
to
Declaration of Alexander Kondo, Oct. 15, 2021
[Kondo
Decl.])

Quevedo-Garcia was
originally cited
along with
BB Frame LLC (BB Frame)
for the
violations and
proposed
penalties that
remain
here
alleged
against Quevedo-Garcia
alone. As to BB Frame, the
alleged
violations and penalties
subsequently became final orders against
it,
as detailed infra.

BB Frame LLC (BB Frame)

BB Frame
was organized as
a
New Jersey limited liability company
on April 13,
2017
and
was voluntarily dissolved about 42 months later, on November 19, 2020. (Exs. 9 & 10 to Kondo Decl.). QuevedoGarcia
owned
70%
of BB Frame
and
was its only officer, serving as
its
president. Quevedo-Garcia’s
sister,
Magda QuevedoGarcia,
was the only other member of BB Frame, owning
30%.

(Exs. 7 & 8
to
Kondo
Decl.;
Quevedo-Garcia
Motion
for Summary
Judgment, Sept. 23, 2021 [QuevedoGarcia Mot.]
¶ 10). BB Frame maintained its principal office and place of business at the Quevedo-Garcia
Residence. (Ex. 4 to Kondo Decl.).

BB Frame was a construction contractor engaged mainly in framing small to medium sized
residential structures. (Exs.
4 &
31
to
Kondo
Decl.;
Quevedo-Garcia Mot.
¶¶ 1
& 10).

5.
Quevedo-Garcia was the only person authorized to hire, terminate, direct, train or discipline employees of BB Frame. (Ex. 31 to Kondo Decl.).

Quevedo-Garcia was the only person to sign contracts, work orders, and service agreements with customers on behalf of BB Frame. (Ex. 4 to Kondo Decl.). Quevedo-Garcia was the only person authorized to withdraw money from the bank accounts of BB Frame. (Ex. 31 to Kondo
Decl.).

The Secretary’s ability to discover and present evidence relating to BB Frame’s formation, operations, and dissolution in support of his motion for summary judgment was substantially impeded by QuevedoGarcia’s invocation of his Fifth Amendment privilege against compulsory selfincrimination, which
Quevedo-Garcia
first formally asserted through counsel on July 16, 2021,
and which he has thereafter maintained. (As described infra in the Discussion, the undersigned sustained QuevedoGarcia’s invocation of the Fifth Amendment privilege in orders
that denied
discovery motions
filed by the Secretary.)

Frame
Q
LLC (Frame
Q )

Frame Q LLC (“Frame Q”) was organized as a New Jersey limited liability company
on January 21,
2013
with
Quevedo-Garcia
as the sole owner and its
president. (Exs. 2,
3,
31
to
Kondo
Decl.;
Quevedo-Garcia
Mot.
¶ 1).

Frame Q maintained its principal office and place of business at the Quevedo-Garcia Residence. (Exs. 2, 3, & 4 to Kondo Decl.).

Frame Q
was
voluntarily dissolved on April 7, 2019. (Exs. 5 & 6, Kondo).

Frame Q was a construction contractor engaged mainly in framing small to medium sized
residential structures. (Exs.
4 &
31
to Kondo Decl.;
Quevedo-Garcia Mot.
¶ 1).

QuevedoGarcia was the only person authorized to hire, terminate, direct, train or discipline employees of Frame Q. (Ex. 31 to Kondo Decl.). Quevedo-Garcia was the only person to sign contracts, work orders, and service agreements with customers on behalf of Frame
Q.

(Ex. 4 to Kondo Decl.). Quevedo-Garcia was the only person authorized to withdraw money from the bank accounts of Frame Q. (Ex. 31 to Kondo Decl.).

B M
Frame LLC (B M
Frame)

BM Frame LLC (BM Frame)
was organized as a New Jersey limited liability company
on December 24,
2019
with two members––Quevedo-Garcia (75% owner) and Hector F. Roca (25% owner).

(Exs. 1, 11 & 12
to Kondo Decl.). At the time of its
formation, BM Frame
sought and obtained authorization from the State of New Jersey to operate under the
alternate name of “BB Frame.”

(Exs. 12 & 13
to Kondo Decl.).

BM Frame
sought and obtained a
license
from
the State of New Jersey as a home improvement contractor and is engaged
in framing small to medium sized
residential structures. (Exs. 12
& 29
to Kondo Decl.).

BM Frame maintains its principal office and place of business at the Quevedo-Garcia
Residence.

(Ex. 12
to
Kondo Decl.).

The Secretary’s ability to discover and present evidence relating to BM Frame’s
formation and
operations in support of his motion for summary judgment was substantially impeded by QuevedoGarcia’s invocation of his Fifth Amendment privilege
against compulsory selfincrimination.

Q Properties LLC ,
Q Properties II LLC , and Q Nails Boutique LLC

Q Properties LLC (Q Properties) is a limited liability company formed on February 5, 2018, with an address at the Quevedo-Garcia Residence. Quevedo-Garcia owns 60% and
his sister
Magda owns 40%. Q Properties is in the business of renting and selling real estate. (Exs.
1, 3 &
14 to Kondo Decl.).
A company named Q Properties II LLC (Q Properties II) has an
address at
the
QuevedoGarcia
Residence. (Kondo Decl. ¶ 16). There is no information in the record regarding the identity of the owners of Q Properties II, but
in 2020,
BM Frame issued checks totaling $18,000 payable to Q Properties II, as described infra.
A company named Q Nails Boutique LLC (Q Nails) is a limited liability company solely owned by QuevedoGarcia’s sister, Magda. In the spring of 2020, Quevedo-Garcia wrote four checks from BM Frame’s checking account totaling $11,600 for the apparent benefit of Q Nails, as described
infra. (Ex. 36 to Kondo Decl.).
The Secretary’s ability to discover and present evidence relating to Q Properties, Q Properties II, and
Q Nails in
support of his motion for summary judgment was substantially impeded by Quevedo-Garcia’s invocation of his Fifth Amendment privilege
against compulsory selfincrimination.

Citations and Proposed Penalties
Precipitating These
Consolidated Cases (Nos. 20-1029, et al).

These five consolidated cases involve five separate citations that were originally issued to both BB Frame and to Quevedo-Garcia. The five citations
alleged
a total of 33 separate violations of
construction industry workplace safety and health standards codified in 29 C.F.R. pt. 1926, that are alleged to have occurred over a period of about three months from December
5,
2019
to
March 2,
Of the 33 alleged violations, thirteen were classified as serious, twelve were classified as repeat, and eight were classified as willful. Among the alleged repeat and willful violations were the following:

a. All
five citations alleged either a willful or a repeat violation of fall protection in residential construction standard, codified at 29 C.F.R. § 1926.501(b)(13).

b. All
five citations alleged either a willful or
a
repeat violation of the
eye and face protection standard codified at 29 C.F.R. § 1926.102(a)(1).

c. Three of the five citations alleged
repeat violations of the head protection standard codified at 29 C.F.R. § 1926.100(a).

d. The
citations
collectively set forth
nine
alleged
violations of the Stairways and Ladders standard codified at 29 C.F.R. pt. 1926,
subpt. X. Three of those
alleged violations
were classified as repeat violations, and two others were classified as willful violations.

The
five
citations proposed penalties totaling $2,004,225. The details of each of these five citations are described in following
¶¶ 18–53.

Case 20-1029
(Inspection 1450621 Opened on Dec. 5, 2019)

On December 5, 2019,
a
compliance safety and health officer
(CO)
from
the area office of the Occupational Safety and Health Administration (OSHA) in Hasbrouck Heights, New Jersey,
opened
OSHA
inspection
number
1450621
at
a
residential construction site
in Cliffside Park, New Jersey at
700 Palisades Avenue. BB Frame
was engaged in construction activities at this worksite
at this time.

BB Frame’s president,
Quevedo-Garcia,
was present at the worksite and spoke with
the
CO.

Quevedo-Garcia told the CO that the name of his business
doing the construction work
was Frame Q and that the employees at the site were Frame Q employees.

He said this even though Frame Q had been formally dissolved eight months earlier in April 2019. Two trucks present at the worksite
displayed
logos for Frame Q on the sides and rear of the
trucks,
and at the time of the inspection the registered owner of at least one of the
trucks
remained
Frame Q. (Sydenstricker
Decl.
¶¶ 13–15).

About four months after the inspection, in April 2000, an attorney for QuevedoGarcia informed
OSHA
that Frame Q was out of business. (Sydenstricker
Decl.). OSHA determined thereafter that BB Frame was the company performing the construction work at the site on December 5, 2019
(although the evidence of record does not reveal how OSHA
arrived at
this determination).
On June 2, 2020,
OSHA issued a Citation and Notification of Penalty
to both the company, BB Frame, and to
the individual, Quevedo-Garcia. The citation identified BB Frame
to be doing business as “Frame Q LLC.”

The citation alleged also that
BB Frame
was the successor company
of
Frame Q. The
citation
against BB Frame and Quevedo-Garcia
alleged
nine violations
(four classified as serious, three as willful, and two as repeated).

The citation
proposed penalties totaling
$520,860.

The citation alleged that the
two
“repeated”
classifications
were
predicated on
prior violations
by Frame Q
that
had
become final orders
in 2017.
One of the alleged willful violations
cited the standard for
fall protection
in
residential construction, which is codified at 29 C.F.R. § 1926.501(b)(13), alleging
two
separate instances
that had
occurred on December 5 and on December 6.
BB Frame and Quevedo-Garcia timely contested the citation
and proposed penalties,
and the
independent
Occupational Safety and Health Review
Commission (Commission)
subsequently
docketed the matter
and
assigned
it docket number 20-1029.

The Secretary
then
filed a complaint
alleging that
both BB Frame and Quevedo-Garcia “are employers within the meaning of section 3(5) of the Act”
and realleging against both BB Frame and QuevedoGarcia
all
the
violations
and proposed penalties
described in the citation. The complaint alleged further that Quevedo-Garcia “as owner and
principal of both BB Frame
LLC and Frame
Q LLC, abused the corporate form in an
attempt to evade liability for prior violations”
of the
OSH Act.

(Compl.
¶ II
& III, Aug. 27, 2020).

BB Frame and Quevedo-Garcia duly filed a
joint
answer
that generally denied the allegations of the complaint. In the joint answer,
BB Frame expressly denied that BB Frame was the successor company to Frame Q,
and
Quevedo-Garcia
expressly
denied any personal liability
for
the violations
alleged.

(Answer, Sept. 11, 2020). The joint answer
interposed
“separate defenses” as follows (among others not described): (a) “BB Frame is not a successor to Frame Q, but is separate and a distinct corporation,”, (b) “[Quevedo-Garcia]
individually has no liability and no relationship of any
kind, nor responsibility to”
the
Complainant, and (c) “Any relationship by and between
[Respondents]
and
[Complainant]
were corporate in nature
and not personal.”

BB Frame later withdrew its notice of contest
respecting case number 20-1029
(as well as its notices of contest in the
four
other
cases with which it has been consolidated,
as reflected in the caption). (Withdrawal, Apr. 5, 2021). After that withdrawal, the undersigned issued an order severing
BB Frame from case 20-1029
and
further severing
BB Frame
from the four
other
cases with which case 20-1029 was consolidated. Upon
BB Frame’s
severance from case 201029,
the claims against
BB Frame were
assigned to a
newly opened
Commission case
with
docket number 21-0635.
As a result of BB Frame’s withdrawal of its notice of contest in case 20-1029, the violations and proposed penalties set forth in the citation issued to
BB Frame
on June 2,
2020
that arose out of inspection 1450621
became a final order
against BB Frame
in case 210635
on
August 23, 2021.
After
the severance of BB Frame from case 20-1029 (and the consolidated cases reflected in the caption)
QuevedoGarcia
remained
the
sole respondent.

The parties
executed
a formal stipulation in which
Quevedo-Garcia
expressly agreed to
“waive[]
any defense to the Citations and Notifications of Penalty other than the defense that
[he]
should not be held liable for the Citations and Notifications of Penalty in his individual capacity.” (Stipulation, May 22, 2021).

Case 20-1030
(Inspection 1470364 Opened on Dec. 31, 2019)

On December 31, 2019, a
CO
from
OSHA’s
area office in Hasbrouck Heights, New Jersey,
opened
OSHA inspection number 1470364
at
a residential construction site
in Fort Lee, New Jersey at
2400 6th Street. BB Frame was engaged in construction activities at this worksite at this time. BB Frame’s president, Quevedo-Garcia, was present at the worksite and spoke with the
CO. The same trucks
that displayed
logos of Frame Q that were present
at the
Cliffside Park worksite on December 5, 2019, were present at the Fort Lee worksite. (Sydenstricker
Decl.).
On June 2, 2020,
after having been informed by an attorney for Quevedo-Garcia that Frame Q was no longer in business,
OSHA issued a Citation and Notification of Penalty to both the company, BB Frame, and to
the individual, Mr.
Quevedo-Garcia. The citation identified BB Frame to be doing business as “Frame Q LLC.” The citation alleged also that BB Frame was the successor company of Frame Q LLC. The citation
alleged two serious, three willful, and one repeat violations and proposed penalties totaling $433,146. The citation alleged that the classification for the “repeat” violation was
predicated on
a
prior violation by Frame Q
that
had
become a final order
in 2017.

One of the alleged willful violations cited the standard for fall protection in residential construction, codified at 29 C.F.R. § 1926.501(b)(13).

BB Frame and Quevedo-Garcia timely contested the citation and proposed penalties, and the Commission subsequently docketed the matter and assigned it docket number 20-1030. The
Secretary
then filed a complaint
setting forth allegations
substantially identical to those
described supra in
¶ 24
in connection with case 20-1029. BB Frame and Quevedo-Garcia duly filed a joint answer that
was identical to the joint answer filed in case 20-1029 described supra in ¶ 25.
BB Frame later withdrew its notice of contest respecting case number 20-1030
and the other four consolidated cases reflected in the caption above. (Withdrawal, Apr. 5, 2021). After that withdrawal, the undersigned issued an order severing BB Frame from case 20-1030
and
from
the other consolidated cases. Upon
BB Frame’s
severance from case 20-1030, the claims against BB Frame were assigned to a newly opened Commission case
with
docket number 21-0636. The violations and proposed penalties set forth in the citation issued to BB Frame on June 2,
2020
that arose out of inspection
1470364
became a final order
against BB Frame
in case 210636
on August 23, 2021.
After
the severance of BB Frame from case 20-1030
(and the consolidated cases reflected in the caption)
QuevedoGarcia
remained
the sole respondent. The parties
executed
a formal stipulation in which Quevedo-Garcia
waived all defenses other than the defense that he should not be held personally liable as described supra in ¶ 28.

Case 20-1042
(Inspection 1470345 Opened on Jan. 7, 2020)

On January
7, 2020, a
CO from OSHA’s area office
in Hasbrouck Heights, New Jersey,
opened OSHA inspection number 1470345 of a residential construction site
in Cliffside Park, New Jersey
at 671 Grove Avenue.

BB Frame
was engaged in construction activities at this worksite.

BB Frame’s president, Quevedo-Garcia, was present at the worksite and spoke with the
CO. The same trucks
displaying logos of Frame Q that were present at the
two
BB Frame
worksites
in December 2019 as described above were present at the
Grove Avenue worksite. (Sydenstricker
Decl.).

On June 2, 2020,
after having been informed by an attorney for Quevedo-Garcia that Frame Q was no longer in business,
OSHA issued a Citation and Notification of Penalty to both the company, BB Frame, and to the individual, Mr. Quevedo-Garcia. The citation identified BB Frame to be doing business as “Frame Q LLC.” The citation alleged one serious and four repeat violations and proposed penalties totaling $405,588.
The citation alleged that the classifications for the three “repeat” violations were predicated on prior violations by Frame Q that had become final orders in 2013, 2014, 2017, 2018, and 2019. One of the
alleged repeat violations
cited the
fall protection in residential construction standard, 29 C.F.R. § 1926.501(b)(13),
and averred that
Frame Q had violated that standard eight times before
in
separate violations that had become final orders
between
October 3,
2013
and
February 6, 2019, and further that five of those prior violations
of Frame Q
had been classified as repeated and two had been classified as willful.
BB Frame and Quevedo-Garcia timely contested the citation and proposed penalties, and the Commission subsequently docketed the matter and assigned it docket number 20-1042. The Secretary then filed a complaint setting forth
allegations substantially identical to those described supra in ¶ 24
in connection with case 20-1029. BB Frame and Quevedo-Garcia duly filed a joint answer that
was identical to the joint answer filed in case 20-1029 described supra in ¶ 25.
BB Frame later withdrew its notice of contest respecting case number 20-1042
and the other four consolidated cases reflected in the caption above. (Withdrawal, Apr. 5, 2021). After that withdrawal, the undersigned issued an order severing BB Frame from case 20-1042 and
from
the other consolidated cases. Upon
BB Frame’s
severance from case 20-1042, the claims against BB Frame were assigned to a newly opened Commission case
with
docket number 21-0639. The violations and proposed penalties set forth in the citation issued to BB Frame on June 2,
2020
that arose out of inspection 1470356 became a final order
against BB Frame
in case 210639 on August 23, 2021.
After the severance of BB Frame from case 20-1042 (and the consolidated cases reflected in the caption)
QuevedoGarcia remained the sole respondent.

The parties executed a formal stipulation in which Quevedo-Garcia waived all defenses other than the defense that he should not be held personally liable as described supra in ¶ 28.

Case 20-1031
(Inspection 1464272 Opened on Feb. 20, 2020)

On
February 20, 2020, a
CO from OSHA’s area office
in Hasbrouck Heights, New Jersey,
opened
OSHA inspection number 1464272
of a residential construction site
in Palisades Park, New Jersey
at
20 West Central Boulevard. BB Frame was engaged in construction activities at this worksite. BB Frame’s president, Quevedo-Garcia, was present at the worksite and spoke with the CO. The same trucks
that displayed
logos of Frame Q that were present at the BB Frame’s worksites on December 5 & 31, 2019, and on January 7, 2020, as described above were present at this worksite on February 20, 2020. (Sydenstricker
Decl.).
On June 2, 2020,
after having been informed by an attorney for Quevedo-Garcia that Frame Q was no longer in business,
OSHA issued a Citation and Notification of Penalty to both the company, BB Frame, and to
the individual, Mr. Quevedo-Garcia.

The citation identified BB Frame to be doing business as “Frame Q LLC.” The citation alleged
one
serious,
one
willful, and
two
repeat violations and proposed penalties totaling $274,892.

The
violation alleged to have been
“willful”
cited
the fall protection standard for residential construction, which is codified at 29 C.F.R. § 1926.501(b)(13). That willful
citation item alleged that
the company Frame Q LLC had violated that standard seven
times previously, with those violations having become final orders in
2017, 2018, and 2019, and with all seven of those prior violations having been classified as either willful or repeat violations.
The citation alleged that the classifications
of
the
two
“repeat” violations
were
predicated on prior violations
by Frame Q that
had become
final orders
in 2017, 2018, and 2019.
BB Frame and Quevedo-Garcia timely contested the citation and proposed penalties, and the Commission subsequently docketed the matter and assigned it docket number 20-1031. The Secretary then filed a complaint setting forth
allegations substantially identical to those described supra in ¶ 24
in connection with case 20-1029. BB Frame and Quevedo-Garcia duly filed a joint answer
that
was identical to the joint answer filed in case 20-1029 described supra in ¶ 25.
BB Frame later withdrew its notice of contest respecting case number 20-1031
and the other four consolidated cases reflected in the caption above. (Withdrawal, Apr. 5, 2021). After that withdrawal, the undersigned issued an order severing BB Frame from case 20-1031
and
from
the other consolidated cases. Upon
BB Frame’s
severance from case 20-1031, the claims against BB Frame were assigned to a newly opened Commission case
with
docket number 21-0637. The violations and proposed penalties set forth in the citation issued to BB Frame on June 2,
2020
that arose out of inspection 1464272
became a final order
against BB Frame
in case 210637
on August 23, 2021.
After the severance of BB Frame from case 20-1031 (and the consolidated cases reflected in the caption)
QuevedoGarcia remained the sole respondent. The parties executed a formal stipulation in which Quevedo-Garcia waived all defenses other than the defense that he should not be held personally liable as described supra in ¶ 28.

Case 20-1032
(Inspection 1466351 Opened on Feb. 28, 2020)

On February 28, 2020, a
CO from OSHA’s
area office in Hasbrouck Heights, New Jersey,
opened
OSHA inspection number 1466351 of
the
same
residential construction site
that was the subject of inspection 146427 (case 20-1031) in Palisades Park, New Jersey at
20 West Central Boulevard.

BB Frame was again engaged in construction activities at this worksite. Quevedo-Garcia
was again present at this worksite. The same trucks
displaying
logos of Frame Q that were present at the
same
worksite on February 20, 2020, as described above were present at the
worksite on February 28, 2020. (Sydenstricker
Decl.).

On June 2, 2020, after having been informed by an attorney for Quevedo-Garcia that Frame Q was no longer in business, OSHA issued a Citation and Notification of Penalty to both the company, BB Frame, and to the individual, Mr. Quevedo-Garcia. The citation identified BB Frame to be doing business as “Frame Q LLC.” The citation alleged
five
serious, one willful, and three
repeat violations and proposed penalties totaling $369,739.
The citation alleged that the classifications for the three
“repeat” violations were predicated on prior violations of OSHA standards by Frame Q that had become final orders in 2017, 2018, and 2019.
One of the alleged willful violations cited the standard for fall protection in residential construction, which is codified at 29 C.F.R. § 1926.501(b)(13), alleging two separate instances that had occurred on February 28 and March 2, 2020.
BB Frame and Quevedo-Garcia timely contested the citation and proposed penalties, and the
Commission subsequently docketed the matter and assigned it docket number 20-1032. The Secretary then filed a complaint setting forth
allegations substantially identical to those described supra in ¶ 24
in connection with case 20-1029. BB Frame and Quevedo-Garcia duly filed a joint answer that was identical to the joint answer filed in case 20-1029 described supra in ¶ 25.
BB Frame later withdrew its notice of contest respecting case number 20-1032
and the other four consolidated cases reflected in the caption above. (Withdrawal, Apr. 5, 2021). After that withdrawal, the undersigned issued an order severing BB Frame from case 20-1032
and
from
the other consolidated cases. Upon
BB Frame’s
severance from case 20-1032, the claims against BB Frame were assigned to a newly opened Commission case
with
docket number 21-0638. The violations and proposed penalties set forth in the citation issued to BB Frame on June 2,
2020
that arose out of inspection 1466351
became a final order
against BB Frame
in case 210638
on August 23, 2021.
After the severance of BB Frame from case 20-1042 (and the consolidated cases reflected in the caption)
QuevedoGarcia remained the sole respondent. The parties executed a formal stipulation in which Quevedo-Garcia waived all defenses other than the defense that he should not be held personally liable as described supra in ¶ 28.

Thirteen
Final Orders Against
Frame Q LLC

Alleged
to
Support “Repeat” and “Willful”
Classifications
Alleged
Here

From February
2013
to July
2018,
officials
from
OSHA’s area office in Hasbrouck Heights, New Jersey,
conducted thirteen inspections of Frame Q worksites.

CO Stuart
Sydenstricker
was the lead
OSHA
official
on
seven of those inspections, during which he
directly
explained
OSHA safety requirements to Quevedo-Garcia. CO
Sydenstricker
specifically explained the
requirement that
workers
utilize
certain
fall protection
measures,
and each time Quevedo-Garcia
indicated that he understood
this requirement. Nevertheless, on multiple occasions during
those
inspections, Quevedo-Garcia
said
that
he intentionally does not require
the
employees to
utilize compliant
fall protection
measures
because he did not consider
those measures
to be worth the expense.

(Sydenstricker
Decl.
¶ 7).

Each of the thirteen inspections of Frame Q worksites resulted in
the OSHA area office issuing to Frame Q
a
separate
Citation
and
Notification of
Penalty
relating to
each inspection. Twelve of those thirteen citations ultimately became
final orders in which all the
citations and
proposed
penalties
became final orders as
they had been originally
issued. (One
of the thirteen
citations
did
not
result in the complete affirmance of the citation
items
and proposed penalties as originally issued, but rather resulted reduced penalties and the reclassification of
one
violation pursuant to
the terms of
a formal settlement agreement, as described infra in ¶ 57.) Altogether, the
thirteen citations established
40
violations
of certain construction industry workplace safety and health standards codified in 29 C.F.R. pt. 1926. Of those
40
violations,
twenty-one
were classified as serious, seventeen were classified as repeated, and two were classified as willful.

Those
40
violations
included
the following:

a. Eight violations of the fall protection in residential construction standard codified at 29 C.F.R. § 1926.501(b)(13), five of which were repeat violations and two of which were willful violations.

b. Twelve
violations of
personal protective equipment standards pertaining to eye, face, and head protection. Nine of those
twelve violations were repeat violations.

c. Ten violations
of the
“Stairways and
Ladders”
standard codified at 29 C.F.R. pt. 1926,
subpt. X.

d. Nine
violations of the
“Scaffolds”
standard codified at 29 C.F.R. pt. 1926,
subpt. L.

Two of those
nine violations
were repeat violations.

The penalties
arising out of the thirteen citations
totaled $777,609.

Of that amount,
Frame Q
has
paid
$4,800
that
had been
assessed in connection with an inspection conducted in August 2013
as described infra at ¶ 58. Frame Q did not pay any of the
remaining sum of $772,809 either before or after its voluntary dissolution on
April 7, 2019. (Sydenstricker
Decl.). A summary of those
thirteen prior inspections and resulting citations issued to Frame Q between February 2013 and January 2019
are set forth
infra
in
¶¶ 57–69.

Inspection 897001
of Frame Q Worksite . On February 26, 2013, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 897001 of a residential construction site in Englewood Cliffs, New Jersey at 31 New Street, where
Frame Q was
building a porch on an existing residential structure. On June 19, 2013, OSHA issued a citation and notification of penalty that alleged three violations. Frame Q contested the citation and proposed penalties, and the Commission’s Executive Secretary docketed the matter and assigned it docket number 131603. 1 Frame Q entered into a formal settlement agreement on February 21, 2014, that became a final order of the Commission on April 28, 2014, wherein Frame Q accepted three serious violations and
associated
penalties
that
totaled
$4,180
that were
payable
in ten equal monthly installments. Frame Q
did
not pay the agreed
penalties. (Sydenstricker
Decl.).
Inspection
927166
of Frame Q Worksite . On August 5, 2013, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 927166 of a residential construction site in Paramus, New Jersey at 224 Diane Place. Frame Q was engaged in construction activities at this worksite. On August 28, 2013, OSHA issued a citation and notification of penalty to Frame
Q that alleged two serious violations
and proposed penalties totaling $4,800. 2 Frame Q did not contest the citation and paid the proposed penalty
of $4,800, which is
the only penalty for any established violations of OSHA standards that Frame Q has paid. (Sydenstricker
Decl.).
Inspection 955187
of Frame Q Worksite . On January 16, 2014, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number
955187
of a residential construction site in Teaneck, New Jersey at 368 Edgewood Avenue. Frame Q was engaged in construction activities at this worksite. On July 11, 2014, OSHA issued a citation and notification of penalty to Frame Q that alleged one repeat and
three
serious violations and proposed penalties totaling $23,320. Frame Q did not contest the citation
or proposed penalties
and
consequently
they
became a final order
pursuant to section 10(b) of the Act. Frame Q has not paid the imposed penalties. (Sydenstricker
Decl.; footnote
2, supra, [as to judicial notice of OSHA website information] ).
Inspection
983958
of Frame Q Worksite . On January 24, 2014, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened
OSHA inspection number 983958
at the same
residential construction site in Teaneck, New Jersey at 368 Edgewood Avenue
that had been the subject of inspection 955187, which is
described in the preceding paragraph. Frame Q was engaged in construction activities at this worksite. On July 16, 2014, OSHA issued a citation and notification of penalty to Frame Q that alleged one repeat and two serious violations
and proposed penalties totaling $20,680. Frame Q did not contest the citation and consequently it became a final order pursuant to section 10(b) of the Act. Frame Q has not paid the imposed penalties. (Sydenstricker
Decl.; footnote
2, supra, [as to judicial notice of OSHA website information] ).
Inspection
979064
of Frame Q Worksite . On
March 3, 2014, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number
979064
of a residential construction site in
Englewood Cliffs, New Jersey at
18 Skyline Drive. Frame Q was engaged in construction activities at this worksite. On June 17, 2014, OSHA issued a citation and notification of penalty to Frame Q that alleged one repeat and
four
serious violations and proposed penalties totaling $14,520. Frame Q did not contest the citation and consequently it became a final order
by operation of law on July 23, 2014,
pursuant to section 10(a) of the Act. By letter dated November
23,
2016, Frame Q sought to challenge this final order by filing with the Commission a notice of contest.

The Commission’s Executive Secretary treated this to be a “late notice of contest” and docketed the matter, assigning it case number 16-2015. By decision dated September 22, 2017, a Commission Judge issued an order dismissing Frame Q’s late notice of contest. The order of dismissal became a final order of the Commission on October 25, 2017. Frame Q has not paid the imposed penalties. (Sydenstricker
Decl.; footnote
1, supra
[as to judicial notice of Commission
case
files] ).

Inspection 1052385
of Frame Q Worksite . On January 23, 2015, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 1052385 of a residential construction site in Paramus, New Jersey on Sherwood Drive. Frame Q was engaged in construction activities at this worksite. On April 28, 2015, OSHA issued a citation and notification of penalty to Frame Q that alleged two serious violations and proposed penalties totaling $4,400. By letter dated November 23, 2016, Frame Q sought to challenge the citation and proposed penalties by filing a
notice of contest. The Commission’s Executive Secretary treated this to be a “late notice of contest” and
docketed
the matter, assigning it case
number 16-2011. Frame Q contended in part that it had never been served with the citation. After conducting an evidentiary hearing on September 18, 2017,
a Commission Judge issued a
decision and
order
on February 5, 2018,
determining
in part that (a)
the citation had become a final order by operation of law under section 10(a) of the Act,
(b) Frame Q had failed to demonstrate that it was entitled to relief from this final order, and (c) dismissing Frame Q’s notice of contest. The order of dismissal became a final order of the Commission on
March 8, 2018.

Frame Q has not paid the imposed penalties.

(Sydenstricker
Decl.; footnote
1, supra
[as to judicial notice of Commission files] ).

Inspection 10 42114
of Frame Q Worksite . On February 24, 2015, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 1042114 of a residential construction site in Mahwah, New Jersey at 27 Maple Avenue. Frame Q was engaged in construction activities at this worksite. On
June 22, 2015, OSHA issued a citation and notification of penalty to Frame Q
that
alleged
one serious, one willful, and one repeat
violation,
and proposed penalties totaling $20,680. By letter dated November 23, 2016, Frame Q sought to challenge the citation and proposed penalties by filing a notice of contest. The Commission’s Executive Secretary treated this to be a “late notice of contest” and docketed the matter, assigning it case number 16-2010. Frame Q contended in part that it had never been served with the citation. After conducting an evidentiary hearing on September 18, 2017, a Commission Judge issued a decision and order on February 5, 2018, determining in part that (a) the citation had become a final order by operation of law under section 10(a) of the Act, (b) Frame Q had failed to demonstrate that it was entitled to relief from this final order, and (c) dismissing Frame Q’s notice of contest. The order of dismissal became a final order of the Commission on March 8, 2018. Frame Q has not paid the imposed penalties. (Sydenstricker
Decl.; footnote
1, supra
[as to judicial notice of Commission files]).
Inspection 10 71019
of Frame Q Worksite . On April 22, 2015, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 1071019 of a residential construction site in Fort Lee, New Jersey on Abbott Boulevard. Frame Q was engaged in construction activities at this worksite. On October 5, 2015, OSHA issued a citation and notification of penalty to Frame Q that alleged one serious and two repeat violations, and that
proposed penalties totaling $13,640. By letter dated November 23, 2016, Frame Q sought to challenge the citation and proposed penalties by filing a notice of contest. The Commission’s Executive Secretary treated this to be a “late notice of contest” and docketed the matter, assigning it case number 16-2012. Frame Q contended in part that it had never been served with the citation. After conducting an evidentiary hearing on September 18, 2017, a Commission Judge issued a decision and order on February 5, 2018, determining in part that (a) the citation had become a final order by operation of law under section 10(a) of the Act, (b) Frame Q had failed to demonstrate that it was entitled to relief from this final order, and (c) dismissing Frame Q’s notice of contest. The order of dismissal became a final order of the Commission on March 8, 2018. Frame Q has not paid the imposed penalties. (Sydenstricker
Decl.; footnote
1, supra
[as to judicial notice of Commission files] ).
Inspection 10 76348
of Frame Q Worksite . On June 8, 2015, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 1076348 of a residential construction site in Palisades Park, New Jersey at 462 Second Street. Frame Q was engaged in construction activities at this worksite. On August 10, 2015, OSHA issued a citation and notification of penalty to Frame Q
that
alleged
one willful and
two
repeat violations,
and
that
proposed penalties totaling $25,080. By letter dated November 23, 2016, Frame Q sought to challenge the citation and proposed penalties by filing a notice of contest. The Commission’s Executive Secretary treated this to be a “late notice of contest” and docketed the matter, assigning it case number 16-2013. Frame Q contended in part that it had never been served with the citation. After conducting an evidentiary hearing on September 18, 2017, a Commission Judge issued a decision and order on February 5, 2018, determining in part that (a) the citation had become a final order by operation of law under section 10(a) of the Act, (b) Frame Q had failed to demonstrate that it was entitled to relief from this final order, and (c) dismissing Frame Q’s notice of contest. The order of dismissal became a final order of the Commission on March 8, 2018. Frame Q has not paid the imposed penalties. (Sydenstricker
Decl.; footnote
1, supra
[as to judicial notice of Commission files]).
Inspection 1 113701
of Frame Q Worksite . On December 22, 2015, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 1113701 of a residential construction site in Fort Lee, New Jersey at 1010/1006 Morningside Lane. Frame Q was engaged in construction activities at this worksite. On February 16, 2016, OSHA issued a citation and notification of penalty to Frame Q that alleged two repeat violations and proposed penalties totaling $18,920. By letter dated November 23, 2016, Frame Q sought to challenge the citation and proposed penalties by filing a notice of contest. The Commission’s Executive Secretary treated this to be a “late notice of contest” and docketed the matter, assigning it case number 16-2014. Frame Q contended in part that it had never been served with the citation. After conducting an evidentiary hearing on September 18, 2017, a Commission Judge issued a decision and order on February 5, 2018, determining in part that (a) the citation had become a final order by operation of law under section 10(a) of the Act, (b) Frame Q had failed to demonstrate that it was entitled to relief from this final order, and (c) dismissing Frame Q’s notice of contest. The order of dismissal became a final order of the Commission on March 8, 2018. Frame Q has not paid the imposed penalties. (Sydenstricker
Decl.; footnote
1, supra
[as to judicial notice of Commission files] ).
Inspection
1149505
of Frame Q Worksite . On April 23, 2016, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 1149505 of a residential construction site in Palisades Park, New Jersey at 119 Abbot Avenue.

Frame Q was engaged in construction activities at this worksite. On September 28, 2016, OSHA issued a citation and notification of penalty that alleged two repeat violations
and
proposed
penalties totaling $222,697. Frame Q
timely
contested the citation and proposed penalties, and the Commission’s Executive Secretary docketed the matter and assigned it docket number 161737. Frame Q
formally withdrew its notice of contest by notice dated February 5, 2018, and a Commission Judge approved the withdrawal by order dated February 20, 2018. Consequently, the citation and proposed penalties became a final order on
March 22, 2018. Frame Q
has not paid the imposed penalties. (Ex. 16
to
Kondo Decl.;
Sydenstricker
Decl.; footnote
1
supra [as to
judicial notice of
Commission files] ).

Inspection
126 4265
of Frame Q Worksite . On April 3, 2017, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number
1264265
of a residential construction site in
Fort Lee, New Jersey at
2475 Sixth Street.

Frame Q was engaged in construction activities at this worksite. On September 25, 2017, OSHA issued a citation and notification of penalty that alleged
two serious and
two repeat violations
and
proposing penalties totaling $153,241. Frame Q
timely
contested the citation and proposed penalties, and the Commission’s Executive Secretary docketed the matter and assigned it docket number 172030. After Frame Q failed to timely file an answer to the Secretary’s complaint, a
Commission Judge issued an order to show cause to Frame Q directing
Frame Q
to show cause why it should not be held in default. Frame Q did not formally respond to the order to show cause. However,
Frame Q’s attorney informally advised the Commission on June 20,
2018
that Frame Q had “closed its business” and that
Frame Q would not file any
formal response to the order to show cause. The Commission Judge thereafter filed an order of default affirming the citation and proposed penalties. The order of
default became a final order on August 8, 2018. Frame Q
has not paid the imposed penalties. (Ex. 18
to
Kondo Decl.;
Sydenstricker
Decl.; footnote
1
supra [as to
judicial notice of
Commission files] ).

Inspection
1329463
of Frame Q Worksite . On July 11, 2018, a CO from OSHA’s area office in Hasbrouck Heights, New Jersey, opened OSHA inspection number 1329463 of a residential construction site in Palisades Park, New Jersey at 417 Third Street. Frame Q was engaged in construction activities at this worksite. On January 4, 2019, OSHA issued a citation and notification of penalty to Frame Q that alleged one serious and three repeat violations and proposed penalties totaling $261,451. Frame Q did not contest the citation and consequently it became a final order pursuant to section 10(b) of the Act. Frame Q has not paid the imposed penalties. (Sydenstricker
Decl.; footnote
2, supra
[as to judicial notice of OSHA website information] ).
The penalties imposed on Frame Q
in
the
thirteen inspections
from 2013 to 2018
totaled
$777,609. Of that sum, Frame Q
paid only $4,800. (Sydenstricker
Decl.; footnotes
1
and
2, supra).
The last day that Frame Q made payroll disbursements to employees was on June 1, 2018, when it issued payroll checks to seven individuals. (Ex. 24 to Kondo Decl.). Frame Q made no payroll disbursements after June 1, 2018. (Ex. 24 to Kondo Decl.). OSHA’s last inspection of a Frame Q worksite was opened about six weeks later, on July 11, 2018, which resulted in the issuance of a citation to Frame Q on January 4,
2019
that Frame Q did not contest.
Quevedo-Garcia caused Frame Q to be dissolved on April 7, 2019, which was about ten weeks after the
last
of the
described
thirteen
citations
issued to Frame Q became a final order.
In its federal tax return for tax year 2018, which was dated four days after Frame Q was formally dissolved
in April 2019, Frame Q reported gross receipts of $528,895 and
total income
of $366,528. After deductions
from the total income figure
for expenses such as compensation of officers and salaries and wages,
Frame Q
reported a positive business income of $14,464 for tax year 2018. The
2018
tax return reflects a balance sheet liability for
“accounts payable”
at the beginning of the tax year of $303,318
but by the end of the year that
balance sheet liability
had been reduced by
44%
to $170,807.

(Ex. 2 to Kondo Decl.). There is no evidence regarding the
components
of this balance sheet liability for accounts payable,
or the identity of the creditors. The Secretary’s ability to discover and present evidence relating to the
2018
balance sheet liabilities
for accounts payable in support of his motion for summary judgment was substantially impeded by QuevedoGarcia’s invocation of his Fifth Amendment privilege against compulsory selfincrimination.

On February 6, 2019, the Office of the United States Attorney for the District of New Jersey
(USAO-NJ)
brought a
civil
action
in federal district court
against Frame Q to collect $473,178 in unpaid OSHA penalties relating to eight
of the citations issued to
Frame Q
(the
six
late
contests
plus
the citations that resulted from
inspections
1149505 and 1264265).

The
civil
action also sought $205,325.01 in interest and fees.

On April 7, 2019, two months after the collection action was filed, Quevedo-Garcia caused Frame Q to be voluntary dissolved. About four weeks later, on May 3, 2019, the
USAONJ
filed a voluntary dismissal of its collection action
after concluding that Frame Q
could not be
successfully
served
with the summons and complaint because it had been dissolved.

(Jordan Anger
Decl.).

According to interrogatory responses that QuevedoGarcia verified, Frame Q’s only assets upon its dissolution in April 2019 were three trucks that were to be “transferred with loans”
to BB Frame. (Ex. 4 to Kondo Decl.). At least one of those
vehicles remained officially registered to Frame Q during the underlying inspections
of BB Frame’s worksites involved
here. (Ex. B to
Sydenstricker
Decl.).
In Frame Q’s certificate of dissolution filed on April 7, 2019,
Quevedo-Garcia represented that “[a]ll
assets have been discarded and have been applied to creditors or distributed to members.” (Ex. 6 to Kondo Decl.).

There is no evidence respecting
the extent to which the liquidation of Frame Q’s assets reduced the balance sheet liability for accounts payable that was reported at the end of tax year 2018. The Secretary’s ability to discover and present evidence on this matter of fact in support of his motion for summary judgment was substantially impeded by Quevedo-Garcia’s invocation of his Fifth Amendment privilege.

Quevedo-Garcia caused Frame Q to be dissolved at least in part to avoid collection of unpaid penalties of $772,809 that resulted from
OSHA
inspections of Frame Q worksites. (Quevedo-Garcia Mot.
¶¶ 6–9).
Prior to
Frame Q’s
formal
dissolution April 2019,
Quevedo-Garcia
discontinued
framing operations through Frame Q
and
transitioned
all of
Frame Q’s framing operations to BB Frame. Frame Q’s employees began working for
BB Frame
doing
the same type of construction work and in the same locale
as Frame Q. (Exs. 4,
24, 25,
31
to Kondo Decl.).

B B
Frame LLC
(BB Frame)

On April 13, 2017,
Quevedo-Garcia caused BB Frame to be formed;
its certificate of formation did not identify any member(s) of the company. (Ex. 9 to Kondo Decl.;
Sydenstricker
Decl. ¶ 10). BB Frame was formed
ten days after
OSHA
had
opened
inspection
number
1264265, which was
the twelfth of the thirteen inspections of Frame Q
worksites
described
supra in
¶ 68.) On September 4, 2018, about 17 months after BB Frame had been formed, QuevedoGarcia filed an amendment to BB Frame’s certificate of formation that identified himself and his sister, Magda Quevedo-Garcia, as BB Frame’s only members. (Ex. 22, Kondo Decl.).
In mid-2018, Quevedo-Garcia transferred $20,000 from Frame Q to BB Frame by
issuing three
checks
from Frame Q’s bank account
(dated respectively on June 20, July 21, and August 2, 2018). He signed these checks as the agent of Frame
Q
and
he then endorsed on behalf of BB Frame for deposit into BB Frame’s
bank
account. (Exs. 21 & 31 to Kondo Decl.).
All seven individuals who had received a payroll disbursement from Frame Q on June 1, 2018 (which was Frame Q’s final payroll disbursement before it was formally dissolved about ten months later) began to receive payroll disbursements from BB Frame starting on June 8, 2018. (Exs. 24 & 25 to Kondo Decl.). Four of those seven individuals continued to receive payroll disbursements from BB Frame through December 20, 2019, which was the date
of
BB Frame’s
final
payroll disbursements. (Payroll disbursements from BB Frame to the other three individuals ended respectively on 6/22/18, 3/29/2019 and 6/28/2019, apparently because each had left BB Frame’s employment
on or before
those respective dates.) (Ex. 25 to Kondo Decl.). The day of
BB Frame’s
final
payroll disbursements
(December 20, 2019)
was fifteen days after OSHA
had
opened the first of the five inspections
of BB Frame worksites
that precipitated these consolidated matters. (Ex. 25 to Kondo Decl.).
On
March 12, 2019,
less than four weeks
before Quevedo-Garcia
would
cause
Frame Q
to be voluntarily dissolved,
Quevedo-Garcia caused
BB Frame
to
apply
for a home improvement contractor license with the New Jersey Office of the Attorney General, Division of Consumer Affairs (DCA).

(Ex. 8
to Kondo Decl.). About eleven weeks later, on May 29, 2019, DCA issued
to
BB Frame a New Jersey home improvement contractor license.

(Ex. 23
to Kondo Decl.).

Prior to the OSHA inspections that precipitated these consolidated matters, BB Frame used its business checking account for BB Frame operations, including
issuing
payroll
checks. Beginning November 25, 2019, that checking account
had a consistently negative balance,
causing the
bank
to
force
the account
closed on March 25, 2020. (Ex. 28
to
Kondo Decl.).
BB Frame did not make any payroll disbursements in 2020. (Exs.
1 &
25
to
Kondo Decl.) In 2020,
Quevedo-Garcia
caused payroll disbursements for
framing
projects, including the projects involved in the last
four
of the five underlying inspections here,
to be made by
BM Frame. (Exs. 1, 11, 25 & 29
to
Kondo Decl.).
BB Frame used the three trucks that Frame Q had used in the operation of its framing business, even though at least one of those vehicles remained registered in the name of Frame Q
over
the
course of the underlying inspections. (Ex. B to
Sydenstricker
Decl.; Ex. 4 to Kondo Decl.).
Quevedo-Garcia expressly and falsely held out to OSHA officials during the
first of the
underlying inspections that precipitated these consolidated cases that Frame Q was the company performing
work at the inspected
construction
sites
and
that
the workers were
employees of
Frame Q. (Sydenstricker
Decl.
¶ 14). Quevedo-Garcia did not disclose to OSHA officials that Frame Q
had been
dissolved and that the employees present at the first of the five inspections were employees of BB Frame. Until April 2020, when an attorney for Quevedo-Garcia informed OSHA that Frame Q was out of business,
OSHA
held the
false understanding
that the
employees
present for the five underlying inspections
were Frame Q employees. (Sydenstricker
Decl.
¶ 12).
Prior to the issuance of the citations at issue here on June 2, 2020, OSHA concluded that BB Frame, not the dissolved Frame Q,
was the corporate entity performing the construction
work
at all five of the worksite inspections. Consequently, the citations identified “BB Frame LLC d/b/a Frame Q LLC, as successor to Frame Q LLC” as the cited employer (as well as Quevedo-Garcia individually). The separate complaints filed by the Secretary in each of these five matters continued with this description of BB Frame as both (a) “doing business as” Frame Q, and (b) being a successor company to Frame Q.
On November 19, 2020, Quevedo caused BB Frame to be voluntarily dissolved. This was twelve weeks after the Secretary had filed separate complaints in each of the above captioned matters seeking to affirm all citation items and proposed penalties against
both
BB Frame and Quevedo-Garcia. (Ex. 10 to Kondo Decl.).
There is no evidence that BB Frame had crippling debt when Quevedo-Garcia caused it to be dissolved, which
occurred
before the penalties proposed against BB Frame became final orders. The only evidence of BB Frame’s indebtedness
at the time of its dissolution
is its 2019 tax return which states that at the end of the tax year it had balance sheet liabilities
totaling
$21,754
(exclusive of a balance sheet liability of
$27,500
for “capital stock,” which would have been owing to Quevedo-Garcia and his sister as the only owners of the company). The two balance sheet liabilities
identified that totaled $21,754
were “accounts payable” of $1,557 and “other current liabilities” totaling $20,197 that were not itemized in the return. (Ex. 7 to Kondo Decl.).
Quevedo dissolved BB Frame
not because of overwhelming debt but rather to
avoid
collection of any of the
OSHA penalties
that had been proposed against BB Frame in the underlying citations
(but that had not become final orders against BB Frame at the time of its dissolution). The Secretary’s ability to discover and present evidence relating to QuevedoGarcia’s reasons for dissolving BB Frame in support of his motion for summary judgment was substantially impeded by QuevedoGarcia’s invocation of his Fifth Amendment privilege against compulsory selfincrimination.

BM Frame
LLC
(BM Frame)

On December 24, 2019, about three weeks after OSHA
had
opened the first of the five inspections involved in these consolidated cases, Quevedo-Garcia caused BM Frame to be formed,
with
Quevedo-Garcia
owning 75% and
one
Hector
F.
Roca
owning
25%. 3

(Exs.
11
&
13
to
Kondo Decl.)

The
declared
planned activity
of
the new company was “miscellaneous construction & repair.” (Exs. 13 & 26 to Kondo Decl.).

Two days later, on December 26, 2019, Quevedo-Garcia
caused to be filed with the
State of New Jersey
a certificate
of alternate name
that
authorized BM Frame to do business as
“BB Frame”
even though BB Frame continued to exist as a
New Jersey limited liability company. (Exs. 13 & 26 to Kondo Decl.).
About four weeks later, on January 23, 2020, BM Frame
applied
for a home improvement contractor license with the
State of
New Jersey. The application lists
the name
“BB Frame” as another “name[
] under which
[BM Frame]
does business.” (Ex. 12
to
Kondo Decl.).
On
or about
December 31, 2019, BM Frame opened a
business checking
account under the name “BM Frame LLC
TA
[i.e., “trading as”] BB Frame,”
making an initial deposit of $500. (Ex. 27
to
Kondo
Decl.).
Beginning
in January 2020, BM Frame’s checking account was used as the primary account for
deposits and disbursements for
construction
projects.

In the month of January 2020, there were eleven deposits made into the account
that
totaled
$162,600 and 97 withdrawal transactions
that
totaled
$135,318.

(Exs. 27
& 30
to
Kondo
Decl.).

The record does not disclose the sources of the deposits to the bank account. The Secretary’s ability to discover and present evidence relating to
the sources of these deposits
was substantially impeded by Quevedo Garcia’s invocation of his Fifth Amendment privilege against compulsory self-incrimination.

Starting in January 2020
and continuing to early August 2020,
the
employees
who
supplied
labor for construction projects
performed by
BB Frame and/or BM Frame
were paid
out of
BM Frame’s business checking account.

(Sydenstricker
Decl. ¶¶ 14–21;
Exs. 27, 29 & 30 to Kondo Decl.).

From January
10,
2020
through August 16, 2020, BM Frame made payroll disbursements
totaling $185,980
to eleven individuals. (Exs. 27, 29 & 30
to
Kondo Decl.).

Six of
the
eight employees
who had been on
BB Frame’s payroll
through December 2019
received payroll disbursements
in 2020
drawn on
BM Frame’s business checking account.

QuevedoGarcia’s sister, who was
a 30% owner of BB Frame
but
had not received any payroll disbursements from BB Frame’s business checking account,
receives
payroll disbursements from BM Frame
in 2020
that
totaled
$17,100.

(Exs. 25 & 29
to
Kondo Decl.).

In a letter from the attorney for Quevedo-Garcia dated November 12,
2020
to an attorney for the Secretary, the
attorney
provided a copy of a paycheck written to QuevedoGarcia dated January 13, 2020 that was drawn on BM Frame’s checking account. The attorney represented that Quevedo-Garcia was currently employed by BM Frame, and he erroneously represented that Quevedo-Garcia was not a “principal” of BM Frame. (In truth, Quevedo-Garcia owned 75% of the company). 4 (Exs. 4
& 30
to Kondo Decl.).
In a letter from the attorney for Quevedo-Garcia to an attorney for the Secretary dated June 21, 2021, the attorney stated that
“BM Frame
is a closed
business.” (Ex. F to Sec’y’s Mot.
to Compel, July
7, 2021). No other information was provided regarding the closing of BM Frame. The Secretary’s ability to discover and present evidence on this matter of fact in support of his motion for summary judgment was substantially impeded by Quevedo-Garcia’s invocation of his Fifth Amendment privilege
in July 2021.
In
Quevedo-Garcia’s verified
interrogatory responses
in November 2020,
he
falsely represented that he was not
an “owner, member, partner, shareholder, officer, and/or director” of any companies
other than Frame Q and BB Frame, both of which
he declared in
had been
“closed.” (Ex. 4 to Kondo Decl.). In a later
verified
interrogatory response
in April 2021, Quevedo-Garcia continued to falsely represent that he had no ownership interest or leadership position in any other business organizations other than Frame Q and BB Frame. (Ex. 31 to Kondo Decl.).

Other
Alter Ego Theory Factors

Capitalization and Solvency

BB Frame’s 2019 federal tax return
r eflects the company had a
balance sheet
liability of $27,500 for “capital stock” at both the beginning and the end of the tax year. (Ex. 7 to Kondo Decl.).
BB Frame never owned real property. (Exs. 4 & 7 to Kondo Decl.). Except for trucks,
BB Frame
never
owned tools or
equipment valued
more than
$200. BB Frame utilized three trucks
in its business, at least one of which
remained registered to Frame Q, although BB Frame depreciated
multiple
vehicles on its
2019 federal tax return
(and BM Frame depreciated one vehicle on its 2020 federal tax return). (Exs. 4, 7 & 11
to Kondo Decl.;
Sydenstricker
Decl.).
BB Frame’s business checking account had a negative balance throughout the course
of the
five
OSHA inspections that precipitated these consolidated matters. (Ex. 28 to Kondo Decl.).
BB Frame’s tax return for tax year 2019 reported gross receipts of $388,533 and
total income
of $297,087. The
2019
tax return reflects an
ordinary business
loss of $1,181,
after
making deductions from total income
that
included
deducting
$127,500
in
compensation to QuevedoGarcia.

(Ex. 7 to Kondo Decl.).

BM Frame’s federal tax return for tax year 2020 indicates that at the beginning of the tax year it had no balance sheet liability for capital stock but at the end of the tax year it had a balance sheet liability for capital stock of $42,000. The Secretary’s ability to discover and present evidence relating to
the source of the funds for this stated capitalization of BM Frame
was substantially impeded by QuevedoGarcia’s invocation of his Fifth Amendment privilege against compulsory self-incrimination.
In BM Frame’s federal tax return for tax year 2020,
the company
reported
gross receipts of $426,451
and a total income of $235,066.

The tax return reflects ordinary business income of $12,464, after making deductions from total income
that included
$75,000 in compensation to QuevedoGarcia.

(The 25% owner of BM Frame, Hector Roca, received no compensation in 2020).

(Ex. 11 to Kondo Decl.). Quevedo-Garcia reported his proportionate share
of
BM Frame’s
ordinary business income of $12,464
in 2020
on his personal tax return for tax year 2020. (Ex. 1 to Kondo Decl.).

In a verified interrogatory response,
Quevedo-Garcia
stated that
both Frame Q and
BB Frame
were
“closed
due to debt and insufficient income.” (Ex. 31 to Kondo Decl.).
Quevedo-Garcia caused
BB Frame to
be voluntarily dissolved
at least in part to avoid
collection of
the
proposed
penalties of
$2,004,225. Those proposed penalties
later became
final orders
against BB Frame
after BB Frame had been voluntarily dissolved. (Quevedo-Garcia Mot.
¶¶ 11–14; Anger Decl.).

The Secretary’s ability to discover and present evidence relating to
the reasons that Quevedo-Garcia determined to dissolve BB Frame
was substantially impeded by QuevedoGarcia’s invocation of his Fifth Amendment privilege against compulsory self-incrimination.

C orporate
Officers,
F ormalities
and Corporate
R ecords

Quevedo-Garcia was BB Frame’s president and its only officer. BB Frame’s other member, Magda Quevedo-Garcia, had no role in the operation of the company. (Exs. 4 & 31 to Kondo Decl.).
BB Frame held no formal meetings of its two members. (Ex. 31 to Kondo Decl.).
BB Frame maintained no
operating agreement,
by-laws, resolutions, amendments, meeting minutes, or meeting memoranda.

(Exs. 4, 5 & 32 to Kondo Decl.).

Most of the contracts into which BB Frame entered
with suppliers and other contractors
were verbal agreements only.

(Ex. 31 to Kondo Decl.).

Siphoning of
Corporate
Funds

As indicated supra in ¶ 12,
Quevedo-Garcia
and his sister
Magda
own a company called Q Properties LLC
(Q Properties)
that has its
principal office at the Quevedo-Garcia Residence. Quevedo-Garcia
owns
60%
and
Magda
owns
40%. (Exs. 1, 3 & 14 to Kondo Decl.).

Q Properties is in the business of renting and selling real estate,
and in its 2020 federal tax return it reported receiving rents from residential real estate
with the address
54 Lincoln Avenue, Cliffside Park, New Jersey. Quevedo-Garcia did not identify his ownership interest in Q Properties
in his
verified responses to two sets of interrogatories
(responses dated Nov. 20,
2020
and Apr. 26, 2021), but rather in those responses
he
falsely represented that he
did not have an
ownership interest
in any
companies
other than
Frame Q and BB Frame. (Exs. 4 & 31 to Kondo Decl.). The attorney for Quevedo-Garcia
later
falsely represented to counsel
for the Secretary in a letter dated June 21,
2021
that
Q Properties “is not and was not owned” by Quevedo-Garcia. (Ex. F to Sec’y’s Mot.
to Compel, Jul 7, 2021). (It is presumed that Quevedo-Garcia’s attorney was unaware of the falsity of that representation when he made it.)

Between August 2,
2018
and July 11, 2019, Quevedo-Garcia
caused
$84,600 to be transferred from BB Frame to Q Properties by
issuing
the following checks
written on BB Frame’s business checking account
(Ex. 33 to Kondo Decl.):

a. Check dated August 2,
2018
for $44,000. In the
check’s “memo”
line,
QuevedoGarcia
handwrote the words “Profits.”

b. Check
dated
August
6,
2018
for
$9,600. In the check’s “memo” line,
Quevedo-Garcia
handwrote
what appears to be
the words
“2 Months Deposit Rent and one month rent at”
54 Lincoln Avenue, Cliffside Park.

c. Check dated April 25,
2019
for $26,000. In the check’s “memo” line,
Quevedo-Garcia
handwrote the word “Profits
2018.”

d. Check dated July 1,
2019
for $7,000. The check’s “memo” line
reflects the handwritten words
“Monthly garage rent.”

e. Check dated July 11,
2019
for $8,000. The check’s “memo” line
reflects the handwritten words “Rent for May & June garage at 54 Lincoln Ave Cliffside Park.”

The Secretary’s ability to discover and present evidence of greater detail regarding the
reasons for these disbursements to Q Properties described
in the preceding ¶ 114(a)–(e) in support of his motion for summary judgment was substantially impeded by Quevedo-Garcia’s invocation of his Fifth Amendment privilege.
After
depleting
BB Frame’s checking account in late 2019
and beginning to use BM Frame’s business checking account
for
deposits and disbursements relating to
corporate
construction activities, Quevedo-Garcia
also
began to use BM Frame’s checking account to make
some
payments
that
lack any apparent
connection to
the
corporate
framing
work, as follows:

a. By check dated April 20, 2020, Quevedo-Garcia caused to be transferred to Q Properties
the sum of $2,000. (Ex. 34 to Kondo. Decl.).

b. By five
checks written between April and August 2020, Quevedo-Garcia
caused to
be transferred
a total of $18,000
to
Q Properties II
(a company that
is described supra in ¶ 13).

(Ex. 35 to Kondo Decl.). One of those checks was for the sum of $11,000 and
the memo line of the check
bore the
handwritten
note “Loan to Q Properties II LLC.” Another check had no notation in the memo line. Three checks totaling $7,000 bore
handwritten
notations in their respective memo lines
indicating they were for rent payments for
real property in Fairview, New Jersey at
[redacted]. (QuevedoGarcia
testified
in another Commission proceeding
in September 2017
that
he had
resided
at
that address in Fairview, New Jersey
[Ex. 17
at 8
to
Kondo Decl.].)

c. In
the spring of
2020, Quevedo-Garcia wrote
four
checks from BM Frame’s
checking
account totaling $11,600 for the apparent benefit of
Q Nails
(a company that is
described supra at ¶ 14). Two checks
that were
payable
to Q Nails
totaled $5,900
and reflect
the
handwritten
word “loan” in their
memo
lines. Another check payable to Q Nails
in the sum of $3,000 has no entry
in the memo line. The fourth check
in the sum of $2,700
is
payable
to
an individual
(whose
name not reflected in any other documentation of record)
and
in the memo line
is
handwritten
the words
“June rent for Q Nail Boutique.” (Ex. 36 to Kondo Decl.).

The Secretary’s ability to discover and present evidence of greater detail regarding the reasons for the disbursements from BM Frame’s bank account described in the preceding ¶ 116(a)–(c) in support of his motion for summary judgment was substantially impeded by Quevedo-Garcia’s invocation of his Fifth Amendment privilege.
While Quevedo-Garcia
moved
monies
from
BB Frame and BM Frame bank accounts to other family-owned businesses,
and
he
also
disbursed monies from
those accounts for the benefit
of those other companies,
in some instances other family-owned businesses disbursed their funds for the
apparent
benefit of BB Frame, as described below.

a. The application fee for BB Frame’s home improvement license was paid
in March 2019
by a check drawn on the bank account of Q Nails. (Ex.
8 to Kondo Decl.).

b. An electronic payment
in the amount of $2,470.32 for BB Frame’s state payroll taxes for the fourth quarter of 2019
was made on January 30,
2020
from
a
bank account of
Q Nails. (Ex. 37 to Kondo Decl.).

From June 2018 through August 7, 2020,
Quevedo-Garcia
caused himself to be
paid a salary of $2,500 per week from the payroll accounts of BB Frame and BM Frame. (Exs. 7, 25, 29 & 33 to Kondo Decl.).

D ISCUSSION

Summary Judgment Standard
& Procedures

Commission Rule 40(j) provides that
Rule 56 of the Federal Rules of Civil Procedure ( Rule
56) governs motions for summary judgment in Commission
proceedings . 29 C.F.R. § 2200.40(j) .

Rule 56 (a)
provides
that “[t]he court shall grant
summary judgment if the movant shows that there is no
genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

In determining whether there exists a genuine dispute of material fact, “the substantive evidentiary standards that apply to the case” apply also to assessment of the evidence on motion for summary judgment. Anderson v. Liberty Lobby, Inc . ( Liberty Lobby ) , 477 U.S. 242, 255
(1986)
(ruling that the substantive evidentiary standard of “clear and convincing evidence” for a libel claim must be applied in adjudicating a motion for summary judgment on that claim).

The moving party has the initial burden to show the absence of any genuine dispute concerning any material fact. Celotex Corp. v.
Catrett
( Celotex ) , 477 U.S. 317, 325 (1986)
( discussing
Adickes
v. S.H. Kress & Co. , 398 U.S. 144 (1970 ) ) . If
the moving party discharges
the
initial burden
of
showing that
it is entitled to judgment as a matter of law,
then
the non-moving party “may not rest upon mere allegation or denials of his pleading, but … must set forth specific facts showing that there is a genuine issue for trial.” Liberty Lobby , 477 U.S.
at
248.

Thus, when faced with a properly supported motion for summary judgment, the non-moving party must
“ present affirmative evidence ” that shows there is a genuine dispute for trial.
Id.
at 257. Such “affirmative evidence” includes
“ depositions, documents, electronically stored information, affidavits or declarations, stipulations
…
admissions, interrogatory answers, or other materials ” as described in Rule 56(c)(1)(A).

Manua's , Inc. ,
27 BNA OSHC 1469, 1472-73 ( No. 18-1059, 2018)
(nonmovant cannot overcome summary judgment merely based on the possibility that material facts it has not yet identified
exist
but
instead
must present facts essential to justify its opposition) ,
aff'd , 948 F.3d 401 (D.C. Cir. 2020) .

Rule 56(e) sets forth the potential consequences of a non-moving party’s failure to make the required affirmative showing of specific facts in response to a properly supported motion for summary judgment:

(e)
Failing to Properly Support or Address a Fact.

If a party fails to properly support an assertion of fact or fails to properly address another party’s assertion of fact as required by Rule 56(c), the court may …

(1) give an opportunity to properly support or address the
fact;

(2)
consider the fact undisputed for purposes of the
motion ;

(3)
grant summary judgment if the motion and supporting materials — including the facts considered undisputed — show that the movant is entitled to it ; or

(4) issue any other appropriate order .

For a party opposing a properly supported motion for summary judgment to show the existence of a genuine dispute of material fact, the evidentiary material favoring the non-moving party must be sufficient to permit a finder of fact to find in the non-moving party’s favor. Liberty Lobby , 477 U.S.
at 249. But if that evidentiary material “is merely colorable,
or is not significantly probative, summary judgment may be granted.” Id.
at 249-50 (internal citations omitted). A
mere
combination of “conclusory allegations, improbable inferences, and unsupported speculation” will not defeat a properly supported summary judgment motion.

Calvi
v. Knox County , 470 F.3d 422, 426 (1st Cir. 2006) .

In considering a motion for summary judgment
a court is
“ required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against
whom summary judgment is sought.”

Stern v. Trustees of Columbia Univ. , 131 F.3d 305, 312 (2d Cir.
1997) ;
see also Liberty Lobby , 477 U.S.
at
255 (1986) (the “evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor”), and
Ford Motor Co. , 23 BNA OSHC 1593, 1594 (No. 10-1483, 2011)
( stating that
“a judge is not to decide factual disputes ,” but rather must “ determine whether any such disputes exist” ).
“[N] ot
only must there be no genuine dispute as to the evidentiary facts, but there must also be no controversy as to the inferences to be drawn from them. ” Ford Motor , 23 BNA OSHC at 1594,
citing
Schwabenbauer
v. Bd. of Educ. of City Sch. Dist. of City of Olean , 667 F.2d 305, 313 (2d Cir. 1991).

When, as here,
both parties move for summary judgment,
“each party’s motion must be independently evaluated under”
these same principles.

Ford Motor , 23 BNA OSHC at 1594 . “A judge is not obligated to grant judgment as a matter of law to either
side, and
may deny both motions.” Id.

Establishing “Employer” Stat u s Based on Alter Ego Theory

Where civil penalties under the Act have been assessed against a corporate employer for that
corporate
employer’s violation of OSHA standards, t he
Commission has authority
under the Act to
“ pierce the corporate veil ”
to
hold an individual
(or
a
different
business organization)
responsible for
the
corporate employer’s
violations and
responsibility for
resulting
penalties. Altor, Inc. , 23 BNA OSHC 1458 (No. 99-0958, 2011);
see also
United States v. Cusack , 806 F. Supp. 47, 51 (D.N.J. 1992)
(determining that
the corporate structure of an employer may be disregarded to impose criminal liability on an individual as an “employer” under section 17(e) of the Act upon proof that the individual’s “role in a corporate entity (particularly a small one) may be so pervasive and total that
[the
individual]
is in fact the corporation and is therefore an employer” subject to criminal liability
under
section 17(e) ).

Whether to pierce the corporate veil to find an individual
(or other entity)
to be an “employer” as defined in the Act
involves the application of
federal common law
that articulates
an “alter ego” theory of liability. See
United States v. Pisani
( Pisani ), 646 F.2d 83, 88 (3d Cir. 1981). In the Third Circuit, which is one of the courts
to
which judicial review of a final decision of the Commission in this matter may be sought,
the
substantive evidentiary standard of proof
to
establish
alter ego
liability
is
“clear and convincing evidence.” 5
Trustees of Nat. Elevator Indus. Pension, Health Benefit & Educ. Funds v.
Lutyk
( Lutyk ), 332 F.3d 188, 192 (3d Cir. 2003).

“The ‘clear and convincing evidence’ standard is the intermediate burden of proof, in between ‘a preponderance of the evidence’ and ‘proof beyond a reasonable doubt.’ ”
Araujo v. N . J .
Transit Rail Operations, Inc.
( Araujo ), 708 F.3d 152, 159 (3d Cir. 2013). The quality of evidence
for
meeting
the “clear and convincing”
standard
is
such
evidence
as
shows
that
“the truth” of the facts
claimed
is “highly probable.”

Id. ,
quoting
Colorado v. New Mexico , 467 U.S. 310, 316 (1984).

The
federal common law
analysis
for
piercing
a corporate veil
has
two
prongs:
(1) determining whether
“a company has not operated as an entity separate from its shareholders,” and (2)
determining whether
“the situation presents an element of injustice or fundamental unfairness.” Altor , 23 BNA OSHC at
1461, citing
Pisani , 646 F.2d
at
88.

In considering
the first
prong, which
pertains
to
determining
whether “a separate corporate personality no longer exists,”
id. ,
the Commission
has
noted that the Third Circuit “weighs
several factors” as follows:

(1) gross undercapitalization; (2) insolvency; (3) failure to observe corporate formalities; (4) non-payment of dividends; (5) siphoning of funds of the corporation by the dominant stockholder; (6) non-functioning of other officers or directors; (7) absence of corporate records; and (8) corporation acts as a mere facade for the operations of the dominant stockholder or stockholders.

Id . 6

The Third Circuit has observed that these factors do not constitute “elements of a rigid test,”
Lutyk , 332 F.3d at 194,
and
indeed
do not constitute a “test” at all,
but rather are considered “to determine whether the debtor corporation is little more than a legal fiction.” Lutyk , 332 F.3d at 197. The Third Circuit has noted further that
the factors
do not constitute “the exclusive approach to corporate veil piercing.” Am. Bell Inc. v.
Fed'n
of Tel. Workers of Pa.
( Am .
Bell) , 736 F.2d 879, 886 (3d Cir. 1984).

The
second prong
of the Third Circuit’s
analysis—that the situation
presents
an element of injustice or fundamental unfairness—includes situations in which disregarding the corporate form would
“prevent
circumvention of a statute or avoidance of a clear legislative purpose.”

Pisani , 646 F.2d at
88 (concluding the
Medicare statute
would be circumvented if the corporate form were not disregarded to hold an individual responsible for Medicare overpayments
that had been
made to
the
corporation), citing
United States v. Normandy House Nursing Home, Inc.
( Normandy House ), 428 F. Supp. 421 (D. Mass. 1977)
disapproved on a different issue, United States v. Hughes House Nursing Home, Inc. , 710 F.2d 891, 894 (1st Cir. 1983) ;
see also
Altor , 23 BNA OSHC at
1461
n.
6 (noting that the Third Circuit and New Jersey have similar
“tests”
for piercing the corporate veil,
and
observing that the New Jersey
approach
involves determining “whether recognizing the corporate form would perpetuate fraud or injustice, or otherwise circumvent the law”);
Quinn v.
Butz ,
510 F.2d 743, 758 n. 95
(D.C.
Cir. 1975) (noting that among the situations in which federal courts have disregarded the corporate form “are those wherein the corporate fiction would enable circumvention of a statute”). The Third Circuit has noted further that piercing the corporate veil may be in order “when
recognition of the corporate entity would defeat public policy.” Am .
B ell , 736 F.2d
at
886, quoting
Zubik
v.
Zubik , 384 F.2d 267, 272
(3d Cir.
1967).

“It is valid to organize a corporation for the purpose of avoiding personal liability.” Pardo v. Wilson Line of Washington, Inc. , 414 F.2d 1145, 1149 (D.C. Cir. 1969).

Indeed, the
very
name given to the kind of business entity that is involved here–– limited liability
company––indicates as much.

Moreover, “the mere fact than an individual is the sole stockholder of a corporation will not by itself make him liable as the alter ego of the corporation.” Normandy House , 428 F. Supp.
at
424;
accord
DeWitt Truck Brokers, Inc. v. W. Ray
Flemming
Fruit Co.
( DeWitt Truck ), 540 F.2d 681, 685 (4th Cir. 1976) (“the mere fact that all or almost all of the corporate stock is owned by one individual or a few individuals, will not afford sufficient grounds for disregarding corporateness”).

Accordingly,
“penetration of the corporate veil is a step to be taken cautiously,”
Quinn v.
Butz ,
510 F.2d
at 759, and analysis “must start from the general rule that the corporate entity should be recognized and upheld, unless specific, unusual circumstances call for an exception.” Zubik
v.
Zubik , 384 F.2d
at
273;
accord
Am .
Bell
736 F.2d at 886 (“court may only pierce the veil in
‘specific, unusual circumstances’, lest it render the theory of limited liability useless”), and
Altor , 23 BNA OSHC at 1461 (“corporate entity should be recognized and upheld unless specific, unusual circumstances call for an exception”).

“In deciding whether to pierce the corporate veil, courts are basically concerned with determining if equity requires that the shareholders’
traditional insulation from personal liability be disregarded and with ascertaining if the corporate form is a sham, constituting the facade for the operations of the dominant shareholder.” Kaplan v. First Options of Chi . , Inc.
( Kaplan ),
19 F.3d 1503, 1521 (3d Cir. 1994),
aff'd , 514 U.S. 938 (1995),
quoting
Wheeling–Pittsburgh Steel Corp. v.
Intersteel , Inc. , 758 F.
Supp. 1054, 1057
(W.D.Pa.1990).

“In short, the evidence must show that the corporation's owners abused the legal separation of a corporation from its owners and used the corporation for illegitimate purposes.” Kaplan,
19 F.3d at 1521.

“[T]he requirements for corporate veil piercing are demanding ones”
to be sure,
Altor
23 BNA OSHC at
1461,
but
proof of “fraudulent intent” is not an essential component of establishing alter ego liability
under federal common law. Lutyk , 332 F.3d at 194 (“our test does not require proof of actual fraud as a prerequisite for piercing the corporate veil”);
accord ,
DeWitt Truck ,
540 F.2d
at
684 (“proof of plain fraud is not a necessary element in a finding to disregard the corporate entity”), citing
Anderson v. Abbott , 321 U.S. 349, 362
(1944);
Labadie Coal Co. v. Black , 672 F.2d 92, 99 (D.C. Cir. 1982) (“fraud is not a prerequisite in a suit to disregard a corporate fiction”).

In
DeWitt Truck , the Fourth Circuit noted that
circumstances
justifying
“disregard [of] the corporate fiction …
vary according to the circumstances of each case, and every case where the issue is raised is to be regarded as
sui generis
to
be decided in accordance with its own underlying facts.” 540 F.2d at 684
(internal
footnotes omitted).

Quevedo-Garcia’s Motion for Summary Judgment

Because
it is the
Secretary’s
burden
to
prove
alter ego liability,
for
Quevedo-Garcia to prevail on his motion for summary judgment
on the Secretary’s
alter ego
claim,
he
must
show
initially
“that there is an absence of evidence to support the
[Secretary’s]
case.” Celotex , 477 U.S.
at
32 5
(1986). Quevedo-Garcia
can satisfy this initial burden by showing
that there
exists
no clear and convincing evidence
that would
support findings in favor of the Secretary on the material facts.

See
Rule 56(c)(1)(B) (one method of demonstrating that a fact cannot be genuinely disputed is by “showing … that an adverse party cannot produce admissible evidence to support the fact”).

Quevedo-Garcia’s motion for summary judgment fails to
satisfy the
initial burden
of showing
th at the Secretary will be unable to produce clear and convincing evidence to
impose
alter ego liability.

Quevedo-Garcia’s
motion appears grounded
at least in
part on the
proposition that proof of fraud is essential to imposing alter ego liability. ( See
Quevedo-Garcia Mot .
¶¶ 21–22 ) .

However, as
noted
earlier ,
proof of fraudulent intent is not
essential to establishing alter ego liability
under federal common law . Lutyk ,
332 F.3d at 194.

In any event ,
in the
Secretary’s cross-motion for summary judgment (which served also as the Secretary’s response to Quevedo-Garcia’s
cross- motion) , t he
Secretary pr oduced
clear and convincing
evidence that would support a finding
that Quevedo-Garcia acted with some
fraudulent intent :

Quevedo-Garcia falsely told
an
OSHA official
who conducted
at least some of
the underlying inspections
that the corporate entity performing the work
at the
inspected worksites
was Frame Q . 7 B ut Quevedo-Garcia knew that this
representation was
false . He had
caused
Frame Q
to be
dissolved months
earlier ,
and
he knew that
his own salary and
the employees’ wagers were being paid
from the bank accounts of either BB Frame or BM Frame .
In addition to
affirmatively misrepresent ing
that
the
employer on site
was Frame Q ,
Quevedo-Garcia
also
failed to disclose
to
inspecting OSHA officials
the material fact
that the corporate entit y
performing the
construction
work w as
BB Frame (and/or BM Frame, which
had been
formed on December 24, 2019 ) .
The only reasonable inference from
Quevedo Garcia ’s intentional misrepresentatio n and failures to disclose
a
material fact
is that he was
attempting to deceive
OSHA officials
and
thwart
them
in accurately identifying the corporate employer that was doing the construction work
at these
work sit es.

As d escribed s upra in Facts ¶ 6 ,
Quevedo-Garcia invoked his Fifth Amendment right against compulsory self-incrimination
during
the
discovery phase of this litigation. 8

In a non-criminal matter such as this, Quevedo-Garcia’s invocation of his Fifth Amendment privilege
allows
the drawing of
adverse inferences for his refusal to respond to probative evidence offered against him. See Baxter v.
Palmigiano , 425 U.S. 308, 318 (1976)
( Palmigiano )
(“[T]he Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them”);
Rad Servs., Inc. v. Aetna Cas. & Sur. Co. , 808 F.2d 271, 274 (3d Cir. 1986). But before any such adverse inference may be drawn, the record must contain independent evidence to support any negative inference. See United States v.
Stelmokas
( Stelmokas ) , 100 F.3d 302, 311 (3d Cir. 1996) (“Thus, as long as there was independent evidence to support the negative inferences beyond the invocation of the privilege against self-incrimination, the inferences could be drawn”);
Palmigiano , 425 U.S.
at
318 (observing that the entry of judgment based only on the invocation of the privilege and “without regard to the other evidence” exceeds constitutional bounds) .

Quevedo-Garcia’s invocation of the Fifth Amendment privilege permits the inference here that
if he were asked why he falsely
represent ed
to OSHA officials that the employer at the construction sites was Frame Q ,
that
his responses would
lend
support
to
the Secretary’s
alter ego
claim .

I f Quevedo-Garcia’s motion had
met
the
initial burden of demonstrating t he absence of clear and convincing evidence
to pierce the corporate veil of BB Frame ,
then to defeat Quevedo Garcia’s motion the Secretary would have been required to “ present affirmative evidence ” that would be sufficient to support findings in favor of the Secretary on the material facts. Liberty Lobby , 477 U.S.
at
2 57
(1986)
(“[T] he plaintiff, to survive the defendant’s motion, need only present evidence from which a jury might return a verdict in his favor ”).
As
is next
discussed, the Secretary’s opposition to Quevedo-Garcia’s motion
(which was combined with his cross-motion for summary judgment)
sets forth ample
facts to support findings in favor of the Secretary
on
the
facts
that are material to the
alter ego claim . But
m ore significantly, the Secretary’s cross-motion
establishes that the Secretary is entitled to judgment as a matter of law on th e claim that
Quevedo-Garcia
is an employer under an alter ego theory of liability and is
personally responsible for BB Frame’s violations and the resulting imposed penalties , as is discussed next .

Secretary’s Motion for Summary Judgment

The Secretary’s motion seeks judgment as a matter of law that Quevedo-Garcia
was an
“employer”
as defined in section 3(5) of the Act and thus subject to the compliance requirements of section 5(a) and
liable for
penalties assessed under section 17 (a)–(d) . 29 U.S.C. §§ 652(5), 654(a), 666 (a)–(d) .

The Secretary argues that Quevedo-Garcia was an “employer” under two
different
but somewhat related
theories .

The Secretary argues f irst
that Quevedo -Garcia
wa s
the
statutory employer of the employees at the construction sites under the
common law agency
analysis set forth in
Nationwide Mut. Ins. Co. v. Darden
( Darden ) , 503 U.S. 318 (1992) .

T he Secretary argues
second
th at
Quevedo-Garcia was a statutory employer of the employees at the construction sites under a common law alter ego analysis
that the Commission
recognized in
Altor,
23 BNA OSHC 1458.

B oth theories would achieve the
Secretary’s objective of imposing personal liability on
Quevedo Garcia . Under
alter ego
theory, Quevedo-Garcia’s liability
under the citations
would be coextensive with BB Frame’s
liability
( which has
b een established
by final orders
in Commission cases 21 0635,
21-0636, 21-0637, 21-0638, and 21-0639) . See
Altor,
23 BNA 1548 (affirming certain citations and penalties against
two
corporat ions
that constitute d
a “single employer,”
but
determining
the
evidence
was insufficient
to
support finding that two individuals who operated th ose
corporations were
also
employers under an
alter ego
theory ) .

In contrast, Quevedo Garcia’s liability under
Darden
would conceptually preclude holding BB Frame liable for the same violations and penalties (all of which have now become final orders against BB Frame). 9
See, e.g., Froedtert Mem. Lutheran Hosp., Inc.
( Froedtert ) ,
20
BNA OSHC
1500 , 1508 n. 4
( No. 97-1839, 2004) ( utilizing the common law agency doctrine of
Darden
in
determining that a hospital was the employer of
temporary housekeepers
who worked at the hospital on referral from temporary
employment agenc ies; expressly deciding
not
to adjudicate an alternative “joint employment” theory of liability in which both the hospital
and
the temporary employment agencies would be deemed to be
statutory
employers of the temporary housekeepers).

Statutory Employer Analysis
under
Darden

In determining wh ether an
entity
has an employment relationship with an
identified worker
to the exclusion of some other
entity ,
“ the Commission has consistently applied the commo n law agency doctrine”
set forth in
Darden . Freight C ar
Am . , Inc. , No. 18-0970, 2021 WL 2311871, at *2 ( OSHRC,
Mar. 3, 2021)
( applying
Darden
in
ruling that
the Secretary had failed to prove that
a parent company was the statutory employer of
certain
workers w hose wages were paid by
the parent’s
subsidiary
company );
All Star Realty Co. , 24 BNA OSHC 1356, 1358-59 (No.
12 1597,
2014) (applying
Darden
factors
in assessing whether two individuals ,
who were not otherwise identified to be employees of any other entity ,
were
statutory
employees
of the cited company ) .

The
common law agency doctrine
of
Darden
“incorporate[s]
traditional agency law criteria for identifying master-servant relationships .” 503 U.S. at 319. The
Court in
Darden
identified the following
factors
as
be ing
“relevant to this inquiry”:

the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.

Darden , 503 U.S. at 323-24. The Commission has noted “that
there is no precision to the weighing of all of these factors .” Froedtert ,
20
BNA OSHC at
1508 .

T he evidentiary material presented
on the
cross- motions reflects
genuine dispute s
of
material
fact
respecting whether
the workers at the construction sites had
a master-servant relationship
with
Quevedo-Garcia
to the exclusion of BB Frame .

For example, t he
workers’
wages
were
disbursed
from corporate bank accounts. ( Exs . 24, 25 & 29 to Kondo Decl.). Also,
c orporate entities obtained
liability insurance and worker’s compensation ins urance
respecting the
workers . ( See
insurance documentation
filed by Quevedo-Garcia in opposition of Secretary’s motion
dated Oct. 28, 2021). While
Quevedo-Garcia was the only
individual
authorized to hire, terminate, direct, train or discipline
the workers at the various construction sites,
on
this record
there
are
genuine disputes
of fact
about whether he
exercised
that authority as an
agent of BB Frame
or as a
de facto
sole proprietor.

Th e whole of the
evidence
is
s usceptible of differing inferences on whether
it was Quevedo Garcia, not BB Frame (or BM Frame), that had a conventional master servant relationship with the workers
at the construction sites
under
a
Darden
analysis , thus preclud ing
granting
summary judgment to the
Secretary on this theory .
See
Ford Motor , 23 BNA OSHC at 1594 .

Alter Ego
Analysis of
Altor

The
preceding
conclusion
that
genuine disputes of material fact exist
with respect to the Secretary’s
Darden
theory
doe s not
preclude
reaching
a different conclusion
on
the
Secretary’s
a lter ego
theory. As previously noted, unlike
statutory employer status
under
Darden
that
identif ies
a single
employer
to which an
identified
employee has a master-servant relationship,
a lter ego
theory
involves
assigning statutory employer status
with respect to an
identified
employee
to
more than a single employer. Specifically, under alter ego theory , statutory employer status
with respect to the
same employee (s)
is assigned to
both
(1)
a corporate employer ,
and
(2)
an
individual or
other
business organization
for whom the corporate employer
is
an alter ego.
See, e.g. ,
Altor ,
23 BNA OSHC
at 1461
(recognizing applicability of alter ego theory
for
hold ing
individual s
liable for a corporate employer’s violations and penalties
under the Act , but concluding the evidence was insufficient to establish alter ego liability
on the individuals ). T he Secretary
seeks to hold Quevedo-Garcia responsible
for th e same
violations and penalties
that have become final orders against BB Frame
in Commission cases 21 0635,
21-0636, 21-0637, 21-0638, and 210639. Assigning
statutory
employer
status
under the Act
to more than one employer
as to the same employees
is
a permissible outcome
under
alter ego theory .

For the Secretary to prevail on
his
cross-motion for summary judgment
on alter ego theory , he must make
an
initial showing that the
only
reasonable
conclusion
arising
from
the
summary judgment record
is
that
it constitutes “ clear and convincing
evidence ”
to impose
alter ego
liability on Quevedo-Garcia .

If the Secretary succeeds in making this initial showing, Rule 56 does not permit Quevedo-Garcia
to “rest upon mere
…
denials of his pleading,” but rather he “must set forth specific facts showing that there is a genuine issue for trial.”

Liberty Lobby , 477 U.S.
at
248. To make such a showing,
Quevedo-Garcia
must
cite
“to
particular parts of
materials in the record, including
depositions, documents, electronically stored information, affidavits or declarations, stipulations
…
admissions, interrogatory answers, or other materials ”
that
demonstrate the existence of
a genuine issue for trial . Fed. R. Civ. P.
56(c)(1)(A);
s ee
also
Manua's ,
27 BNA OSHC at 1472-73.

Although alter ego
liability entails a multifactored
analysis ,
and
“every case where the issue is raised
is … sui generis
to
be decided in accordance with its own underlying facts,”
Dewitt Truck , 540 F.2d at 684,
in
a proper case
summary judgment may be granted to the party
that is
a lleging alter ego
liability . See
Travelers Prop. Cas. Co. of Am. v.
Quickstuff , LLC , No. CV 14-6105, 2016 WL 7231605, at *9 (D.N.J. Dec. 14, 2016)
(granting summary judgment to the plaintiff on its claim to pierce corporate veil of an LLC). An analysis of the record on summary judgment under the two pronged analysis for alter ego liability follows.

First Prong
of Alter Ego Analysis :

Eight
Factors Concerning
the
Existence of
a
Separate Corporate Personality

Gross
Undercapitalization

Underc apitaliz ation of a corporate entity
is
a factor in alter ego analysis
to prevent shareholders from retaining the profits of the business “without having any real capital in the undertaking” and therefore risking nothing of their own.

DeWitt Truck ,
540 F.2d
at
689 ;
see also Laborers’ Pension Fund v. Lay-Com, Inc. , 580 F.3d 602, 612 (7th Cir. 2009) (“ [I] f the shareholders do not invest enough equity, such that the corporation is undercapitalized, there is no basis for rewarding them by limiting their liability, and, in fact, doing so would only encourage risky behavior”).
Assessing the adequacy of
capitalization
generally involves looking to
the
initial capitalization at the time of organization, but “[s] ubsequent
capitalization may also be relevant
to
[the]
inquiry, ” in that “ evidence of inadequate subsequent capitalization may be indicative of initial undercapitalization . ”

Matter of
Multiponics , Inc. , 622 F.2d 709, 71 7
(5 th
Cir. 1980) . Also ,
“ proof of subsequent undercapitalization may be further proof of inequitable conduct, such as actions of gross mismanagement,
self interest , and the like .” Id.
at 718.

The
only direct evidence of BB Frame’s initial capitalization is
contained in
its 2019 federal tax return
which states that
the company had
a
balance sheet
liability
of $27,500
for “capital stock” at both the beginning and
the
end of the tax year. (Ex. 7 to Kondo Decl.). Quevedo-Garcia certified in
BB Frame’s certificate of dissolution filed with the state of New Jersey in
November 2020 that “all assets have been discarded and have been applied to
creditors or distributed to its members . ” 10

(Ex.
10
to Kondo Decl.) .

There is no
direct
evidence respecting
the
level of capital ization
that is appropriate
for a co mpany of BB Frame’s size , business activity,
and location . Cf.
Altor , 23 BNA OSHC at
1462 (noting “ there is no evidence as to the amount of capital required for a similarly sized company in the same industry ”
as the
subject
corporation s );
Lutyk ,
332 F.3d at
1 98
( noting the absence of evidence respecting the amount of capital necessary to engage in the corporate activity involved). Thus, w ith respect to the “gross undercapitalization” factor, t he record on the motion for summary judgment does not
support alter ego liability . 11
Cf.
Lutyk ,
332 F.3d at
196– 98 (imposing alter ego liability
even though
the evidence
did not establish
gross
undercapitaliz ation) .

Failure to Observe Corporate Formalities ;
Absence of
Corporate Records

BB Frame held no meetings of members ,
so of course there are
no
corporate records
that would evidence such meetings , such
as
minutes or corporate resolutions . ( Ex s . 31
& 32
to Kondo Decl.). BB Frame had no
operating agreement
( which is
the
equivalent of corporate
by-laws
for an LLC ) . (Ex. 32 to Kondo Decl.).

According to Quevedo Garcia,
BB Fram e’s contracts with
other contractors
or
suppliers
were mostly
oral contracts
grounded in
“longtime relationship between the parties . ” (Ex. 31 to Kondo Decl.).

Quevedo-Garcia acknowledges that “there is evidence of a failure to observe corporate formalities,” though he contends that there is no evidence that this failure was “malicious” or involved an “effort to defraud OSHA or the Secretary.” (Quevedo-Garcia Mot .
8).

A ccepting as true for purposes of analysis that there was
no
malicious or fraudulent intent attached to
BB Frame’s
failure to observe corporate formalities, the absence of such formalities
nevertheless
bears on whether Quevedo-Garcia, as
the sole officer of BB Frame and its
majority owner , took measures for BB Frame “to maintain a separate corporate identity,” which
is
the crux of the first prong of
alter ego
analysis. Labadie Coal Co. v. Black , 672 F.2d
at
9 7 (observing that “ the formalities are themselves an excellent litmus of the extent to which the individuals involved actually view the corporation as a separate being ”) ;
Altor , 23 BNA OSHC at 1461 (noting that the first prong of alter ego analysis
pertains to determining whether “a separate corporate personality no longer exists”).
The “ disregard of corporate formalities or failure to maintain corporate records ” may justify
piercing the corporate veil
“ if it is also shown that a corporation's affairs and personnel were manipulated to such an extent that it became nothing more than a sham used to disguise the alter ego's use of its assets for his own benefit . ”

Kaplan , 19 F.3d
at
1521 ;
b ut
cf.
Zubik , 384 F.2d
at
271
n. 4 (stating the “lack of formalities in a closely-held corporation has often not been found to have much consequence”), cited by the Commission in
Altor , 23 BNA OSHC at 1462, n. 10
(noting that the “Third Circuit has afforded varying weight to a closely held company’s failure to observe corporate formalities”).

One
prominent
instance of a
combined failure to observe corporate formalities
and
to
maintain corporate records is that BB Frame adopted no resolution
authorizing the
company to
transfer
to
Q Properties ( another
LLC
of which
Quevedo-Garcia and his sister
were the only members)
any of the five checks total ing
$84,600
that were issued
over
a
1 2 - month
period
in 2018 and 2019. (Ex. 33 to Kondo Decl.) .
A reasonable inference from such substantial transfer of funds from one
closely-held
company to another is that
the transfers were not in furtherance of
the transferring company’s
corporate purpose .

Quevedo-Garcia has not argued that the record on the motion permits any other reasonable inference, and he has certainly not presented any evidentiary material that would support an
opposing
inference. Having presented no such evidence
as R ule
56 requires
that he
do
to address the Secretary’s evidence supporting that inference ,
that reasonable inference is
deemed undisputed for purposes of the motion pursuant to Rule 56(e)(2). Moreover,
Quevedo-Garcia ’s
declared refusal
based on his Fifth Amendment privilege
to respond to questions
p ermits the adverse inference that his response s
to questions regarding these
cash
transfers
from BB Frame
to Q Properties would support the Secretary’s claim for alter ego liability. See
Stelmokas , 100 F.3d
at
311 .

Non-functioning of Other Officers and Directors

The “non-functioning of other officers and directors” factor does not weigh in support of alter ego liability. Although Quevedo Garcia’s sister was 30% owner of BB Frame, she had no legal duty to have any role in the operations of the company .

T he record on summary judgment reflects that only Quevedo Garcia, as BB Frame’s
president and its
only officer, had operational or managerial r esponsibilities . (Ex. 31 to Kondo Decl.).

Non-payment of
Dividends

As to the “non-payment of dividends” factor,
BB Frame
has
made no cash distributions
of profits
(which
is an
LLC ’s
equivalent of a corporate dividend)
to either of its two members. (Ex. 31 to Kondo Decl.).

The absence of any distribution of profits (i.e., dividends)
is
not by
it sel f
generally
accorded much weight
for piercing the corporate veil of a
closely - held
company. Lutyk , 332 F.3d at 196 (noting that
non-payment of dividends by a
closely-held
corporation
is “ not unusual, and not a strong factor in favor of piercing the corporate veil of such a company ”);
accord
Altor , 23 BNA OSHC at 1462 ;
but cf.
Lutyk , 3332 F.3d at 196 ( noting
that
“ many jurisdictions actually hold that the payment of dividends at a time when a corporation is insolvent favors piercing the corporate veil ” ).

While BB Frame made no cash distributions to
its
two members , BB Frame paid Quevedo Garcia a
weekly
salary
of $2,500
from
June 8,
2018
through December 20, 2019
(for a total of $202,500 over that period) . After that , from January 10,
2020
to August 8, 2020,
Quevedo Garcia
receiv ed
a weekly salary of
$2,500
that was
disbursed
from
BM Frame ’s checking account . BB Frame’s other member, Magda Quevedo-Garcia, received no
salary or
wages from BB Frame,
but she
did receive
$17,100 in
wages from BM Frame
over 19 weeks in 2020 . ( Exs . 7 ,
25
& 2 7
to Kondo Decl.) .

The “ failure to pay dividends while paying substantial sums, whether by way of salary or otherwise, to the dominant stockholder, all fitting into a picture of basic unfairness, ” may be
appropriately
considered in determining whether to
impos e
individual liability under
an alter ego theory. DeWitt Truck ,
540 F.2d
at
687 .

Here, the re is no
evidence that
Quevedo Garcia’s
$2,500 weekly salary was
unreasonable
for the president of a company of BB Frame’s size , business activity, and location . There
being
no independent evidence in the
summary judgment
record indicat ing
the
salary
to be unreasonable ,
no adverse inference
is made based on
Quevedo Garcia’s
invoking his Fifth Amendment privilege and
refus ing
to be deposed and subject to questioning respecting the reasonableness of his salary .

See
Stelmokas , 100 F.3d at 311.

Siphoning of Funds ;
Insolvency

In its 2019 federal tax return, BB Frame reported gross receipts of $388,553 and a total income of $297,087. After deductions from this
total income figure
(which included
a deduction of
$127,500 in compensation to Quevedo-Garcia)
the tax return reflected an ordinary loss of $1,181 for the year. (Ex. 7 to Kondo Decl.).

BB Frame’s business checking account had a balance of over $20,000 on November 1, 2019. But by the end of that month the account had a negative balance. The account continued to
maintain a negative balance in varying amounts until the bank forced the account closed in March 2020, when the account had a negative balance of $1,830.77. (Ex. 28 to Kondo Decl.).

The first of the underlying inspections here was opened in early December 2019, before Quevedo-Garcia formed BM Frame, but at a time when BB Frame had no money in its bank account.

Over
the duration of the five underlying inspections here, BB Frame was a shell of a company, with no assets of significant value other than trucks (at least one of which remained registered to Frame Q, and all of which continued to display Frame Q’s logo).

BB Frame’s bank account had become depleted in November 2019 in part because BB Frame
had
transferred
$84,600 to Q Properties between August 2018 and July 2019 (as previously
addressed
in the discussion pertaining to the failure to observe corporate formalities).

After forming BM Frame in
late
December 2019,
Quevedo-Garcia
began financing
the framing business
entirely
using
BM Frame’s bank account. 12 (Exs. 27 & 28 to Kondo Decl.).

In the month of January 2020, there were eleven deposits made into BM Frame’s account totaling $162,600 and 97 withdrawal transactions totaling $135,318. (Exs. 27 & 30 to Kondo Decl.). (The summary judgment record does not reflect the sources
of any of the deposited funds.)

While there is no 2020 tax return in the record for BB Frame, there is one for BM Frame
for that tax year. In tax year 2020, BM Frame reported gross receipts of $426,451, total income of $235,066, and ordinary business income of $12,464. (Ex. 11 to Kondo Decl.).

BB Frame’s insolvency throughout the period of the
five underlying
inspections was a consequence of Quevedo-Garcia’s transfer of the financing of framing operations from BB Frame’s bank account to BM Frame’s bank account. There is no evidence
in the summary judgment record
that
BM Frame
was ever
insolvent. It is reasonably inferable that BM Frame’s solvency and profitable operations in 2020 were
achieved
at the expense of
the solvency of
BB Frame, which Quevedo-Garcia choreographed
to insolvency in 2019. Quevedo-Garcia has pointed to no affirmative evidence
to
controvert this reasonable inference.

After Quevedo-Garcia began using BM Frame’s
bank
account to
conduct
BB Frame’s framing business, he began causing
money from
BM Frame’s bank account
to
be
disbursed
to other family-owned companies. The record on the motion for summary judgment is devoid of evidence that these payments were in furtherance of the corporate
operations of either BB Frame or BM Frame. Given the absence of any affirmative evidence offered by Quevedo-Garcia in opposition to the Secretary’s motion for summary judgment to indicate
that these disbursements were for a legitimate corporate purpose, the only reasonable inference to draw from the evidence is that the
disbursements
did not
benefit BB Frame. See Fed. R. Civ. P. 56(e)(2). Moreover,
Quevedo-Garcia ’s
invocation of the Fifth Amendment privilege and
his
declared refusal to respond to questions that would pertain to such
transfers of funds
permi ts
t he adverse inference
that the
purposes of those cash
transfers would support the Secretary’s alter ego claim . See
Stelmokas , 100 F.3d
at
311 .

Corporate Form a Mere Façade
for Operations of Quevedo-Garcia

While e vidence
that a company
is
a mere façade for the operations of
a
dominant member is not essential to piercing the
company’s
corporate veil ,
Lutyk ,
332 F.3d at 194 , there is
abundant evidence here
indicat ing exactly that .

As
previously described
in connection with other factors, b efore
depleting
BB Frame’s bank account
in November 2019, Quevedo Garcia caused BB Frame
and BM Frame
to transfer cash to other family businesses for no discernable corporate purpose benefiting BB Frame. The
$84, 6 00
transferred
from BB Frame
to Q Properties is the most prominent example . Th at transfer of monies
is
compelling
evidence that
BB Frame was not a
legal entity
separate from Quevedo-Garcia ,
but rather
that Quevedo-Garcia operated
BB Frame
as if
it
were
an interchangeable extension of
himself,
manipulat ing
BB Frame
for his own purposes and
not for the company’s benefit.

Quevedo-Garcia’s
transition ing the
financing
of
framing operations from
BB Frame ’s bank account
to BM Frame ’s bank account
in early 2020 , after OSHA had begun to inspect BB Frame worksites,
echoed the transition
that
Quevedo Garcia
had
implemented
in 2018
when , after many of the
proposed
penalties against Frame Q had become final orders,
he
transition ed
the
framing business from Frame Q to BB Frame ,
even though all the while
he continued
to
hold out the name
“ Frame Q ” as the company involved
in its construction projects . He went
as far as
to
falsely
tell an
OSHA inspector
during the first of the five underlying inspections here
that
Frame Q was the corporate entity performing the framing work at the inspected site .

Quevedo-Garcia
argues
that “ Frame Q closed its business some years ago, after it became fundamental ly
insolvent due to a variety of contracts, debts, lease agreements and monies
owed to OSHA for fines and penalties. ” (Quevedo-Garcia
Mot.
5). The only evidence of
any
such debt
(other than the OSHA penalties)
is Frame Q’s 2018 tax return that reflected a balance sheet liability
for accounts payable
at the end of the tax year
in the amount
of
$170,807 . However, t hat figure
was
44%
less than
the
accounts payable lia bility
of $303,318
stated to have existed twelve months
earlier
at
the
beginning of that tax year. Th e 2018 tax return’s
“ a ccounts payable”
entry
at the end of the tax year
was the only significant balance sheet liability reflected on the return
( other than a $25,000 liability for capital stock , which Frame Q would have owed to Quevedo Garcia as the sole owner) . Frame Q’s
balance sheet
liability for accounts payable
at the
end
of 2018
represented 18% of its indebtedness for
the
combined figures for
accounts payable and
the
unpaid OSHA penalties . In view of Frame Q’s apparent success in
reducing by 44%
its
balance sheet
liability for accounts payable
between January 1 and December 31,
2018 ,
after
having
collect ed
gross receipts of $528,895 that year,
Frame Q
has not shown that its
claimed
insolvency was
substantially
the result of any debt except the debt
that
result ed
from the imposed
OSHA
penalties. Quevedo-Garcia having failed to properly address the Secretary’s assertion of fact, there
exists
no genuine dispute of material fact that Quevedo-Garcia caused Frame Q to be dissolved and
its
framing business transferred to BB Frame to avoid
collection of
Frame
Q’s
of
liability for the imposed penalties. See
Fed. R. Civ. P. 56(e);
Hartford Underwriters Ins. Co. v.
Paystaffing , LLC , No. 16-CV-1128-CCC-JBC, 2017 WL 773877, at *6 (D.N.J. Feb. 28, 2017)
(finding that allegations that the business of one company was transferred another company,
with
both
companies being
owned by the same individual,
essentially alleges that the
companies were merely a façade for the operations of that individual).

The same conclusion holds with respect to
Quevedo-Garcia’s
transition ing
the financing of
BB Frame’s
framing operations
from
BB Frame’s bank account to
BM Frame ’s bank account ,
a process that
commenced
after the first underlying inspection here w as
opened .
While Quevedo Garcia argues that BB Frame was “closed due to circumstances which were wholly unrelated to OSHA and/or its citations and ultimate fines,”
(Quevedo-Garcia Mot .
6),
he
p oints to no
evidence that BB Frame was closed for any reason
other than the underlying OSHA inspections and resulting
citations and substantial
proposed penalties .

Other than the liability for capital stock (which BB Frame owed to Quevedo-Garcia and his sister), B B Frame’s 2019 tax return reflected balance sheet liabilities
at the end of the tax year
of about $22,000
against
gross receipts of $388,553
out of which Quevedo-Garcia had been paid a salary of
$127,500. (Ex. 7 to Kondo Decl.). The information on the tax return does not
depict a
company in financial distress as of the end of the tax year 2019,
even though by that time
Quevedo-Garcia
had depleted
BB Frame’s bank account
in apparent preparation for
financ ing
framing operations
entirely from
BM Frame’s newly opened bank account.

Quevedo-Garcia ’s argument
that BB Frame was “closed due to circumstances which were wholly unrelated to OSHA and/or its citations and ultimate fines”
might be interpreted to
insinuate
obliquely
that the criminal charges filed against him in December 2019
were a factor in
the
decision to
close
BB Frame (though the company was not dissolved until almost one year later) .

(Quevedo-Garcia Mot .
6) . There is no evidence presented to support any such argument, and the argument would be inconsistent with
BM Frame
having operated
profitabl y
in 2020, as reflected by its 2020 tax return. The only reasonable inference f rom
the evidence presented by the Secretary in support his cross-motion for summary judgment was that Quevedo Garcia
began financing
BB Frame’s business operations
with
BM Frame ’s resources
to
avoid having to pay penalties that he reasonably expected
would
be proposed against BB Frame arising out of the underlying inspections here , and that
Quevedo-Garcia
later
caused BB Frame to be dissolved for t hat
same reason .

Quevedo-Garcia
has
not
address ed
the Secretary’s assertion s
of th ese
fact s
with evidence tending to show the contrary,
and so
th ose
fact s
are
considered undisputed for purposes of the cross-motions for summary judgment. See
Fed. R. Civ. P. 56(e) (2) . Moreover,
Quevedo-Garcia’s
invoking his Fifth Amendment privilege and
declared refusal to respond to questions that would be posed to him regarding th e
trans ition ing
of the framing business among the various corporate entities
permits the adverse inference that his responses to questions regarding th o se
transitions
would support the Secretary’s claim for alter ego liability. See
Stelmokas , 100 F.3d
at
311 .

Second Prong
of Alter Ego Analysis :
An
Element
of Injustice –
Circumvent i on of
Statute / Avoidance of Clear Legislative Purpose

The facts
about
which there is no genuine dispute show in clear and convincing fashion that
it
was
the decisions, actions, and inactions of Quevedo-Garcia that resulted in Frame Q
being determined to have
committed
forty
violations of construction industry standards
in thirteen inspections over the course of about 66 months from 2013 to 2018. Seven teen of
those
forty
violat io ns were
classified as repeated violations and
two
were
classified as willful violations. As the only
individual
with
the
authority to
direct, train or discipline employees of Frame Q (Ex. 31 to Kondo Decl.), the requisite state of mind to support the willful classifications was necessarily that of Quevedo-Garcia, whose state of mind was
imputed to Frame Q.

Kaspar
Wire Works, Inc. ,
18 BNA OSHC 2178, 2181 (No. 90-2775, 2000)
( "The hallmark of a willful violation is the employer's state of mind at the time of the violation" ) ,
aff'd , 268 F.3d 1123 (D.C. Cir. 2001) ;
Cont'l Roof Sys., Inc. , 18
BNA OSHC
1070 , 1071
( No. 95-1716 , 1997)
(“ Where the requisite state of mind is manifested through the actions of supervisory employees, it is imputed to the employer to the same extent as would be a supervisor's knowledge of violative conditions ”) .

During inspections of Frame Q construction sites, Quevedo-Garcia
acknowledged
understanding
th at
Frame Q employees were not complying with fall protection requirements ,
and he stated expressly
that
he
had decided
not
to
require the
employees to implement
compliant fall protection measures because he did not regard
such measures
to be worth the expense. ( Sydenstricker
Decl.). 13

In April 2017
Quevedo-Garcia caused BB Frame to be created ten days after OSHA opened
the twelfth of the thirteen inspections of Frame Q
construction
sites
(inspection
1264265) . In the summer of 2018, a fter
most of the penalties
proposed
against Frame Q had become final orders ,
Quevedo Garcia began to
transfer
money from
Frame Q ’s bank account to
BB Frame ’s bank account ,
and
he
started using
BB Frame’s bank account
exclusively to pay employee wages
and
his own weekly salary of $2,500 .

( Ex s .
21 &
25 to Kondo Decl.). I n January 2019, OSHA issued
the last of
Frame Q’s
thirteen
citation s ,
propos ing
penalties of
$261,451.

The next month,
in
February 2019,
the government brought a c ivil action against
Frame Q
in federal district court
to collect
some of the
unpaid penalties
that had become final orders . The next month,
in March 2019,
Quevedo Garcia
applied
for a home improvement contractor license for BB Frame , and the
month after that
he formally dissolved
Frame Q , thereby successfully
thwarting the collection action
that had been filed against
Frame Q
just two months earlier .

After dissolving Frame Q and rendering
the
unpaid penalties
of $772,809 essentially uncollectable, Quevedo-Garcia continued
operating
the framing business that Frame Q had
conducted
since 2013
through BB Frame . H e operated
BB Frame’s
framing
business
in
precisely
the same fashion that he
had
operated Frame Q’s business –– by knowingly allowing
or instructing
BB Frame employees
(who
had formerly been
Frame Q employees
[see
Exs . 24 & 25 to Kondo Decl. ] )
to
work without
comply ing
with
applicable
workplace safety standards . The five inspections
here of
BB Frame construction sites
that were conducted
over about a three-month period from December 2019 t hrough February 2020
resulted
in
BB Frame
ultimately
being determined to have
committed 33 violatio ns of construction industry standards,
with
t welve
violations
classified as repeated
and eight classified as willful ,
resulting in
penalties
of
$2,004,225
that later became
final orders
against BB Frame . As the only person with authority to
direct, train or discipline employees of
BB
Frame,
the requisite state of mind to support the willful classifications
against BB Frame
was necessarily Quevedo-Garcia’s state of mind,
which
was imputed to
BB
Frame. (Ex. 31 to Kondo Decl.). QuevedoGarcia caused BB Frame to be dissolved
prior to those
violations and penalties becoming final orders
against BB Frame in August 2021, thus effectively making
any
portion
of
those penalties uncollectable from
the now dissolved
BB Frame.

The only reasonable inference from Quevedo-Garcia’s
actions in
forming,
operating, and dissolving
BB Frame,
is that he consciously used
its
corporate form to evade
personal responsibility and
liability for
chronic
and
intentional
violations of applicable workplace safety standards.

Although QuevedoGarcia argues that the corporate
transitions and
maneuverings were “wholly unrelated to OSHA,” he has presented no evidentiary material that would controvert this reasonable inference, and so that inference is considered undisputed for purposes of the cross-motions. Fed. R. Civ. P. 56(e)(2).

The whole of the evidence on the cross-motions supporting
this
finding
is clear and convincing
evidence, which is to say that it highly probable that this
finding
is true. Araujo , 708 F.3d at 159 (“clear and convincing
evidence” is such evidence as shows that “the truth” of the facts claimed is “highly
probable”). Moreover,
Quevedo-Garcia’s invocation of the Fifth Amendment privilege and
declared
refusal to respond to questions
that would pertain to
his formation, operation, and dissolution of
BB Frame permits the adverse inference that his responses would lend support to the Secretary’s alter ego claim. See
Stelmokas , 100 F.3d
at
311 .

Among the
means
that
the Act
advances
Congress’s
declared
“ purpose
and policy … to
assur e
so far as possible every working man and woman in the Nation safe and healthful
working condition s ” is by “providing an effective enforcement program.” 29 U.S.C. § 651(b)(10).

Penalties for violations are a key part of that enforcement program , and “ are meant to inflict pocket-book deterrence. ” Kaspar
Wire Works, Inc. v. Sec'y of Lab or , 268 F.3d 1123, 1132 (D.C. Cir. 2001) .

“The purpose of a penalty is to achieve a safe workplace, and penalty assessments, if they are not to become simply another cost of doing business, are keyed to the amount an employer appears to require before it will comply.” Quality Stamping Prods. Co. , 16 BNA OSHC 1927, 1930 (No. 91-414, 1994),
citing
D & S Grading Co. v. Sec ’ y
of Labor , 899 F.2d 1145 (11th Cir.
1990).

Here,
Quevedo-Garcia obdurate ly
refus ed
to
enable and instruct
employees of
BB Frame
to
comply with applicable
workplace
safety standards . The
increased
frequen cy of inspections
and
likelihood of
progressively more severe sanctions
were
ineffective
in
induc ing
him to
enable and instruct
BB Frame
employees
to
comply with applicable standards. Instead of bringing the compan y
into compliance, Quevedo Garcia
simply
continued operat ing
BB Frame just as he had operated Frame Q, by
consciously and
routinely
flout ing
applicable standards . This
disregard of mandatory standards, which are designed to provide workers
safe and healthful working condition s,
likely
gave
BB Frame
an
unfair
competitive advantage over
construction
employers
that
comply with
those
standards .
See
State Sheet Metal Co., Inc. , 16 BNA OSHC 1155, 116 1
(No. 90-1620, 1993) (consolidated)
( “A primary goal of the Act was to eliminate any competitive disadvantage that a safety-conscious employer might suffer by requiring that every employer comply with the applicable OSHA standards” );
accord
Walker Towing Corp. , 14
BNA OSHC 2072 , 2079
n. 11
( No. 87 1359, 1991 ) .

Quevedo-Garcia had
previously
succeeded in avoiding
having
Frame Q pay
almost
all the penalties that
had been assessed against it. His
creation of BM Frame
just weeks
after OSHA began inspecting BB Frame construction sites
in December 2019
appears to have been calculated
maneuver
to
continu e
BB Frame’s business through BM Frame
( but while still
“doing business as” BB Frame) and
to
continue
flouting
applicable standards
w hile insulating himself from
personal
liability
for the resulting violations
and penalties .

Quevedo-Garcia’s invocation of the Fifth Amendment privilege and his declared refusal to respond to questions that would pertain to reasons for creating BM Frame and transferring the funding of framing operations from
BB Frame’s bank account to
BM Frame’s bank account permits the adverse inference that his responses to such questions would support the Secretary’s alter ego claim. See
Stelmokas , 100 F.3d
at
311 .

Quevedo-Garcia ’s d omination of
companies
that
serially flout ed
applicable workplace standards and
his decisions to
dissolve
two of
th ose
companies to
avoid
collection of any portion of the over $2.7 million in imposed unpaid penalties
circumvents the OSH Act and defeats its clear legislative purpose of assuring safe and healthful working conditions
for workers. The only reasonable
inference
on the cross-motions for summary judgment is that
the
evidence
is clear and convincing that
Quevedo-Garcia
dominated BB Frame and
abused
its
corporate form to circumvent the OSH Act and to avoid the Act’s
stated
legislative purpose
and policy . D isregard of BB Frame’s corporate form
to hold Quevedo-Garcia personally liable for the company’s violations and
resulting
penalties
is necessary to prevent
the
continued
or renewed
circumvention of the OSH Act and avoidance of the Act’s
expressed
legislative purpose
and policy .

Clear and Convincing Evidence
Supports
Piercing
Corporate Veil

The evidence considered on the cross-motions constitutes clear and convincing evidence that Quevedo-Garcia abused BB Frame’s corporate form to circumvent the OSH Act and defeat its expressed legislative purpose and policy . The Secretary’s motion for summary judgment thus presents clear and convincing evidence to support piercing the corporate veil of BB Frame .
There is no reasonable view of the evidence that supports a contrary conclusion. Quevedo-Garcia has not addressed the Secretary’s properly supported motion by producing or citing to other materials in the record (such as documents, depositions, interrogatory answers, affidavits, and the like as described
in
Fed. R. Civ. P. 56(c)(1)(A ) )
that indicates the contrary.

The
Secretary is entitled to judgment as a matter of law
pursuant to Rule 56(a) & 56(e)(3)
that Quevedo-Garcia
was a statutory employer of the BB Frame employees so that he
is
personally responsible
and liable
for the violations alleged in the underlying citations and
the
corresponding proposed penalties.

ORDER

The foregoing decision constitutes findings of fact and conclusions of law
on all material issues of fact, law, and discretion
in accordance with Commission Rule 90(a)(1). 29 C.F.R. § 2200.90(a)(1).

The Respondent, Juan G.
Quevedo-Garcia,
having expressly stipulated to “waive[]
any defense to the Citations and Notifications of Penalty other than the defense that
[he]
should not be held liable for the Citations and Notifications of Penalty in his individual capacity,”
and having now been adjudicated to be personally liable for those citations and penalties, it is
ORDERED
as follows:

1.
Case 20-1029 . The
Citation
and Notification of Penalty
issued to
Quevedo-Garcia
on
June 2,
2020
arising out of
inspection number
1450621
is AFFIRMED in its entirety and
the proposed
penalties
totaling
$520,860 are
ASSESSED.

2.
Case 20-1030 . The Citation
and Notification of Penalty
issued to Quevedo-Garcia on June 2,
2020
arising out of inspection number 1470364 is AFFIRMED in its entirety and
the proposed
penalties totaling $433,146 are ASSESSED.

3.
Case 20-1031 . The Citation
and Notification of Penalty
issued to Quevedo-Garcia on June 2,
2020
arising out of inspection number 1464272 is AFFIRMED in its entirety and
the proposed
penalties totaling $274,892 are ASSESSED.

4.
Case 20-103 2 . The Citation
and Notification of Penalty
issued to Quevedo-Garcia on June 2,
2020
arising out of inspection number
1466351
is AFFIRMED in its entirety and
the proposed
penalties totaling $369,739
are
ASSESSED.

5.
Case 20-10 42 . The
Citation
and Notification of Penalty
issued to
Quevedo-Garcia
on
June 2,
2020
arising out of
inspection number
1470345
is AFFIRMED in its entirety and
the proposed
penalties totaling
$405,588 are
ASSESSED.

SO
ORDERED.

_ /s/William S. Coleman ____

WILLIAM S. COLEMAN

Administrative Law
Judge

DATED:
March
8 , 2022

1
The description of certain details respecting the citation involved in Commission case 13 1603 is based on taking judicial notice of the docket filings in that Commission case . See
Copomon Enters . , LLC , 24
BNA OSHC
2177 , 2179 n. 1
( No.
13-0709 , 2018 )
(ALJ)
( t aking judicial notice of documents filed in
a
different Commission proceeding) .

Those documents, and other documents pertaining to the underlying inspection, are known to both the Secretary and Quevedo-Garcia.

This j udicial notice
is taken subject to either party’s opportunity to show the contrary. See
5 U.S.C. § 556(e) (providing that “[w]hen
an agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an opportunity to show the contrary ”); Fed. R. Evid. 201(e) (providing that if judicial notice is taken “before notifying a party, the party, on request, is still entitled to be heard”);
L & L Painting Co., Inc. , 22
BNA OSHC
1346 , 1352
( No.
05-0050 ,
2008) .

Either party may exercise the opportunity to show the contrary by requesting to do so
prior to
the date the undersigned’s decision and report is to be filed with the Commission’s Executive Secretary for docketing pursuant to Commission Rule 90(b)(2). [That date is identified in the cover letter under which this decision is being served on the parties pursuant to Commission Rule 90(a)(2). 29 C.F.R. § 2200.90.] If either or both parties file such a request, the undersigned will not transmit the report to the Executive Secretary for docketing on the date identified, but rather may schedule further proceedings as appropriate.

2
The findings
regarding inspection
number
897001
are based in part on
taking judicial
notice
of information
retrieved from
OSHA’s public website
where
OSHA publishes
certain information about
its
numbered inspections
( most recently
access ed on Feb ruary
2 2 , 2022 ,
at
osha.gov/pls/imis/InspectionNr.html ) .
See United States v. Garcia , 855 F.3d 615, 621 (4th Cir. 2017)
(observing that courts “ routinely take judicial notice of information contained on state and federal government websites ”) .
The foundational
documents on which this publicly posted information is
based
are
known to
both
the Secretary and Quevedo-Garcia
but
w ere
not presented on the cross motions for summary judgment. Cf. D ukane Precast, Inc. v. Perez , 785 F.3d 252, 254 (7th Cir. 2015)
( in judicial review a
Commission
decision, the
court of appeals “discovers on [its] own” certain facts
that were published on a municipality’s public website that the court
said it
“would have liked the parties to tell us” ).

Judicial notice of these facts is taken subject to either party’s opportunity to show the contrary. See
5 U.S.C. § 556(e) (providing that “[w]hen
an agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an opportunity to show the contrary ”); Fed. R. Evid. 201(e) (providing that if judicial notice is taken “before notifying a party, the party, on request, is still entitled to be heard”); L & L Painting Co., Inc. , 22
BNA OSHC
1346 ,
1352
( No.
05-0050 ,
2008) .

Either party may
exercise the
opportunity to show the contrary
by requesting to do so
prior to
the date the undersigned’s decision and report is to be filed with the Commission’s Executive Secretary for docketing pursuant to Commission Rule 90(b)(2). [That date is identified in the cover letter under which this decision is being served on the parties pursuant to Commission Rule 90(a)(2). 29 C.F.R. § 2200.90.] If either or both parties file such a request, the undersigned will not transmit the report to the Executive Secretary on the date identified, but rather
may
schedule further proceedings as appropriate.

3
The record does not reflect Mr. Roca having been associated with any other companies controlled by Quevedo-Garcia and does not indicate wh at, if any, involvement
Mr. Roca
had
in the operations of BM Frame. The
Secretary’s ability to discover and present evidence relating to
Mr. Roca’s role in the formation and operation of BM Frame
was substantially impeded by Quevedo Garcia’s invocation of his Fifth Amendment privilege against compulsory self incrimination .

4
The attorney is presumed not to have made a knowing misrepresentation to counsel for the Secretary. The re is no indication that the attorney
knew
that Quevedo Garcia had caused BM Frame to be formed or that Quevedo-Garcia was its majority owner. The record does not reflect the point in the litigation when the Secretary became aware
that
Quevedo-Garcia had created
BM Frame and
was its majority owner .

5
One C ommissioner
has
not ed that the
Third Circuit’s
“clear and convincing
evidence ”
standard
of proof
for
alter ego
liability
“does not appear to be the norm in other circuits.” Altor ,
23 BNA OSHC at
1480
n. 7 ( Comm’r
Atwood )
( dissenting
from Commission’s decision that alter ego liability was not proven ).

6
The D.C. Circuit is
another court to which Quevedo-Garcia may seek
judicial
review of a final
order of the Commission in these proceedings under section 11 of the Act. In
Labadie Coal Co. v. Black , 672 F.2d 92, 96 (D.C. Cir. 1982), the
D.C. Circuit articulated a
two-prong
test
for alter ego liability
that
echoes the test described
by the Third Circuit
in
Pisani :

(1) is there such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist?; and (2) if the acts are treated as those of the corporation alone, will an inequitable result follow?

Relevant to the first question is the issue of the degree to which formalities have been followed to maintain a separate corporate identity.

The second question looks to the basic issue of fairness under the facts.

7
CO Sydenstricker’s Declaration is clear and convincing evidence that Quevedo-Garcia harbored some fraudulent intent in his communications with inspecting OSHA officials. QuevedoGarcia has presented no evidentiary material to controvert that component of the declaration and there is otherwise no evidentiary material in the record on the cross-motions to establish a genuine dispute of that stated fact as is set forth in Sydenstricker’s declaration. It is therefore undisputed for purposes of the cross-motions that Quevedo-Garcia misrepresented to OSHA officials that Frame Q was the corporate entity doing the construction work. See
Rule 56(e)(2) (“If a party … fails to properly address another party’s assertion of fact ... the court may … consider the fact undisputed for purposes of the motion”).

8
Papers of record in this matter show that Quevedo-Garcia was charged
in state court in New Jersey
on December 19, 2019
with
the
following criminal charges:

· third degree crimes of intent to evade tax liability of $87,927.05 for both tax years 2017 and 2018;

· third degree crime of failing to report $824,857.76 in income for tax year 2017;

· third degree crime of failing to report $985,892.40 in income for tax year 2018;

· third degree crime of conspiracy to commit structuring with the purpose of promoting or facilitating engaging in conduct with purpose to evade state and federal transaction reporting requirements regarding currency transactions by breaking down at least $424,000 in currency into smaller sums of cash on at least 52 separate occasions then deposited at two different financial institutions on multiple dates between or about April 2018 to September 2019;

· second degree crime of conspiracy to commit money laundering by engaging in transactions involving property known or which a reasonable person would believe to be derived from criminal activity with the intent to facilitate or promote criminal activity by cashing 661 checks at a check casher in the aggregate of at least $5.7 million then structuring deposits into at least two separate financial institutions in the name of another person or persons or entities for the purpose of facilitating or promoting New Jersey tax offenses;

· first degree crime of money laundering respecting the sum of $5.7 million
(as described
in preceding bullet item).

Quevedo-Garcia’s sister has been charged with the
same
crimes
that are
described in the last three charges in the above
list
of charges
lodged against Quevedo-Garcia. Both
QuevedoGarcia and his sister have filed applications to be admitted to a pre-trial intervention program. ( See
material filed by counsel for Respondent under cover of letter dated July 28, 2021).

Quevedo-Garcia first formally invoked the Fifth Amendment privilege through counsel in a filing made on July 16, 2021, which his counsel re-affirmed in a letter dated July 28, 2021, both of which were filed with the Commission
in opposition to
discovery
motions
filed by the Secretary. Although the parties originally agreed
that
the Secretary
would
depose
QuevedoGarcia, QuevedoGarcia
later
reneged
upon invoking the Fifth Amendment privilege. The Secretary then filed a motion for leave to take Quevedo-Garcia’s deposition, but the undersigned essentially sustained
Quevedo Garcia’s assertion of the privilege and denied the motion in an order dated August 13, 2021. That same order similarly sustained
Quevedo-Garcia’s assertion of the Fifth Amendment privilege
with respect to
responses to
certain interrogatories. Another order
dated October 5, 2021
similarly upheld Quevedo-Garcia’s assertion of the privilege in
denying
the Secretary’s motion that requests for admissions
that Quevedo-Garcia
had
refused
to admit or deny be deemed
admitted.

Quevedo-Garcia’s invocations
of the privilege were
sustained principally on the ground that his framing business
had links to
the financial crimes of which he stands charged. See
Hoffman v. United States , 341 U.S. 479, 488 (1951) (stating that the privilege must be sustained if it is not “perfectly clear, from a careful consideration of all the circumstances in the case … that the answer(s) cannot possibly have such tendency to incriminate”). Despite the invocation of the Fifth Amendment privilege, the Secretary obtained some relevant documentation in
Quevedo-Garcia’s
responses
to requests to produce
documents, in declarations by Quevedo-Garcia
made
in
his
verified responses to interrogatories, and by subpoenaing
financial
documents from an accountant and
from
two banks.

9
T he Commission’s rules of procedure permit the
assertion
of incon gruous
alternative
theories of liability . See
29 C.F.R. § 2200.30(e) (allowing parties to “state as many separate claims or defenses that it has regardless of consistency”) .

Assuming the information on the tax return and on the certificate of dissolution to be true, then by the time that BB Frame was dissolved in November 2020 the
$2 7 , 5 00
representing capital stock had been liquidated either by paying creditors or being distributed to
the owners–– Quevedo Garcia and his sister.

The lack of evidence on this factor may be due at least in part upon Quevedo-Garcia’s invocation of the Fifth Amendment privilege
in
pre-hearing discovery and the
consequent
thwarting of the Secretary’s efforts to
obtain relevant information , as
previously described . Nevertheless, there
is
no independent evidence in the record respecting
the degree of capitalization appropriate for a company of BB Frame’s size , business activity, and location ,
and thus
drawing an adverse inference from Quevedo-Garcia’s silence is not permissible. See
Stelmokas , 100 F.3d
at
311 .

The only exception
to BM Frame’s complete financing of framing operations
that is apparent in the
summary judgment record is that on January 30, 2020,
a
payment of $2,470.32
for BB Frame’s
payroll taxes for the fourth quarter of 2019 was disbursed from a bank account of Q Nails, which
is owned by
Quevedo-Garcia’s sister , who also owned 30% BB Frame . (Ex. 37).

13
The Secretary’s evidence asserting this fact was not addressed by Quevedo-Garcia in his response to the Secretary’s motion as required by Fed. R. Civ. P. 56(c) , so it
is deemed undisputed for purposes of the cross-motions
pursuant to
Rule 56(e)(2).

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On this page

Decision type

ALJ decision

Dockets

20-1029, 20-1030, 20-1031, 20-1032, 20-1042

Decided

April 7, 2022

Presiding judge

William S. Coleman

Outcome

Citations affirmed

Precedential status

Final order, not precedent

Cited standards

29 C.F.R. § 1926.501(b)(13) 29 C.F.R. § 1926.102(a)(1) 29 C.F.R. § 1926.100(a)

Official source

Read the official release (oshrc.gov)

View Official PDF