94-001750 Richard A. Castillo, Jr. vs. Division Of Retirement Status: Closed Recommended Order on Friday, January 20, 1995.

Summary: Petitioner tried to use durable family POA under 89 law to choose benefit option for member but wasn't permissible donee. Also, improper notarization.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RICHARD A. CASTILLO, JR., )

)

Petitioner, )

)

vs. ) CASE NO. 94-1750

)

DEPARTMENT OF MANAGEMENT SERVICES, )

DIVISION OF RETIREMENT, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

A formal administrative hearing was held in this case before J. Lawrence

Johnston, Hearing Officer, Division of Administrative Hearings, on November 22,

1994. The hearing was held by videoconference between Tampa and Tallahassee.

APPEARANCES

For Petitioner: Keith F. Roberts, Esquire

201 North MacDill Avenue

Tampa, Florida 33609

For Respondent: Robert B. Button, Esquire

Department of Management Services

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUES

Whether the purported selection of Option 2 for payment of Florida

Retirement System disability retirement benefits to Lon Emory Sweely, now

deceased, and his beneficiary, the Petitioner, Richard A. Castillo, Jr., was

valid and effective.

PRELIMINARY STATEMENT

On or about December 6, 1990, the Division of Retirement of the Florida

Department of Management Services gave notice to the Petitioner, Richard A.

Castillo, Jr., that it did not intend to give effect to the FRS-11o "Option

Selection Form for FRS Members," which purported to choose Option 2 for payment

of Florida Retirement System disability retirement benefits to Lon Emory Sweely,

now deceased, and his beneficiary, the Petitioner.

On or about January 4, 1991, Castillo filed a Petition directly with the

Division of Administrative Hearings (DOAH) to challenge the intended action of

the Division of Retirement. DOAH sent the Petition to the Division of

Retirement for a proper referral which, for reasons not apparent from the

record, was not done until April 1, 1994. Thereafter, it was assigned to a

hearing officer.

Final hearing in this case initially was scheduled for June 15, 1994.

However, when the Petitioner did not respond to discovery propounded by the

Division of Retirement, final hearing was continued, and the parties were

required to report to the hearing officer when the case was ready to be

rescheduled for final hearing.

The third monthly status report indicated that the case was ready to be

rescheduled for final hearing in the second or third week of November, 1994.

The case was scheduled for final hearing by videoconference on November 22,

1994.

At final hearing, the Division of Retirement Motion for Official

Recognition of the publication entitled "The Notary View" was granted, and the

parties filed a Stipulation as to certain facts. All exhibits were stipulated

into evidence: Petitioner's Exhibits 1 through 8; and Division Exhibits 1

through 9. The Petitioner called four witnesses and testified in his own

behalf. The Division of Retirement called three witnesses.

Neither party ordered the preparation of a transcript of the final hearing,

but they requested 30 days in which to file proposed recommended orders.

Explicit rulings on the proposed findings of fact contained in the parties'

proposed recommended orders may be found in the Appendix to Recommended Order.

FINDINGS OF FACT

1. On or about June 20, 1990, Lon Emory Sweely executed a Division of

Retirement Form FR-13 Florida Retirement System Application for Disability

Retirement. The application indicated that Sweely's disability resulted from

AIDS-related conditions. It selected Option 1, which the application designates

as the "Maximum Benefit" and describes as follows:

Full benefits payable to the member for his

lifetime. If death occurs before the total

benefits paid to member equals the contributions

made, the difference, if any, is refunded to

beneficiary in a lump sum payment.

In so doing, Sweely rejected Option 2, which the application designates as "Ten

Years Certain," and describes:

Lifetime benefit to member, but not less than

120 monthly payments to someone. A decreased

retirement benefit payable to a member during

his lifetime, and in the event of his death

with a period of ten (10) years after his

retirement, the same monthly amount shall be

payable for the balance of such ten (10) year

period to his beneficiary, or in case the

beneficiary is deceased, in accordance with

Section 121.091(3), Florida Statutes, as though

no beneficiary has been named.

The application, also designated the Petitioner, Richard A. Castillo, Jr., as

Sweely's sole beneficiary. (Sweely previously had designated the Petitioner as

his beneficiary, with the Petitioner's mother as the first contingent

beneficiary, on a Division of Retirement Personal History Record Form FRS-M10

(Revised 3/89) executed by Sweely on January 25, 1990.)

2. At the time of Sweely's application for disability retirement, Sweely

knew that he had full-blown AIDS and that his life expectancy would have to be

estimated at approximately two years or less. There also is evidence that Eulah

Lee McWilliams, the principal at the elementary school where Sweely taught,

counseled Sweely on his options and advised Sweely to select the "Ten Years

Certain" option. It is clear that Sweely wanted the Petitioner, and no one

else, to be his sole beneficiary and to be provided for after his death in the

manner and to the extent to which he decided. McWilliams believed that Sweely

wanted the Petitioner to have the benefits of the "Ten Year Certain" Option 2.

Based on their conversations, McWilliams believed that Sweely concurred with her

recommendation in order to provide the maximum possible benefit to the

Petitioner upon Sweely's death. But, in the face of Sweely's knowledge and

McWilliams's advice and understanding, the application indicates that Sweely

selected Option 1.

3. There was evidence that the Petitioner was present and assisting Sweely

when the Form FR-13 was executed and that the Petitioner filled out part of the

form at Sweely's direction, as writing was inconvenient and difficult for Sweely

at the time. But there was no evidence that Sweely was unable to make informed

decisions when he executed Division of Retirement Form FR-13 on or about June

20, 1990.

4. The evidence also did not prove that Sweely's choice of Option 1 was

inadvertent error. At that point in time, Sweely may have wanted to be

optimistic and to be able to enjoy and share with the Petitioner the maximum

possible monthly benefit for as long as Sweely lived. McWilliams testified

that, at the time, Sweely was trying to remain "up-beat" concerning his illness,

in part thinking that this might extend his lifetime.

5. A decision to choose Option 1, contrary to McWilliams's recommendation,

also would not have been inconsistent with an earlier decision by Sweely in

April, 1990, (this time in conformance with McWilliams's recommendation) to

postpone applying for retirement benefits until he exhausted all of his

accumulated fully-paid sick leave. Had Sweely died while on sick leave, the

Petitioner would not have received the additional retirement benefits he is

seeking in this case. (It is not clear from the record exactly what the

benefits would have been, but it seems that the Petitioner would not have been

entitled to any of the additional retirement benefits he is seeking in this

case. Cf. Section 121.091(7), Fla. Stat. (Supp. 1990); F.A.C. Rule 60S-4.008.)

6. A little over a month later, Sweely's condition worsened, and on or

about August 14, 1990, he had to be hospitalized again (as already had happened

from time to time during Sweely's full-blown AIDS.)

7. On or about August 15, 1990, the Division of Retirement approved

Sweely's application for disability retirement, effective July 1, 1990. On the

same date, the Division of Retirement also sent Sweely a Division of Retirement

Form FST-40c (R5/89) Acknowledgement of Retirement Application and a blank FRS-

11o "Option Selection Form for FRS Members." The Form FST-40c (R5/89) requested

that Sweely "review carefully how the option one and two are paid to your

beneficiary." The descriptions of the options in the Form FRS-11o were somewhat

different from those in the Form FR-13 application. Option 1 was not called the

"Maximum Benefit," and it was described as follows:

A monthly benefit payable for my lifetime.

Upon my death, the monthy benefit will stop

and my beneficiary will receive only a refund

of any contributionss I have paid which are in

excess of the amount I have received in benefits.

This option does not provide a continuing benefit

to my beneficiary.

(Emphasis in the original.) Option 2 was not called "Ten Years Certain," and it

was described as follows:

A reduced monthly benefit payable for my lifetime.

If I die before receiving 120 monthly benefit

payments, my designated beneficiary will receive

a monthly benefit payment in the same amount as

I was receiving until the monthly benefit payments

to both me and my beneficiary equal 120 monthly

payments. No further benefits are then payable.

The FRS-11o "Option Selection Form for FRS Members" also stated in bold and

underlined upper case type: "MEMBER MUST SIGN AND DATE IN THE PRESENCE OF A

NOTARY PUBLIC."

8. Whenever Sweely was hospitalized, the emotional strain on the

Petitioner increased, and the time spent with Sweely in the hospital left the

Petitioner less time to accomplish normal household tasks. The Petitioner's

life and home usually became disorganized during Sweely's hospitalizations, and

the Petitioner often allowed mail to pile up at their home at these times.

9. The Petitioner testified that, notwithstanding Sweely's hospitalization

and its disruptive effect on his life and habits, he happened to collect and

read the mail on August 16, 1990. He testified that among the items of mail he

read that day was the envelope postmarked the day before in Tallahassee,

Florida, containing the Division of Retirement Form FST-40c (R5/89)

Acknowledgement of Retirement Application and the blank FRS-11o "Option

Selection Form for FRS Members."

10. The Petitioner testified that he telephoned McWilliams to discuss the

forms with her, and she asked him to bring them to the hospital. He testified,

and she confirmed, that she met with the Petitioner at the hospital, looked at

the forms, and explained them to the Petitioner. Believing, based on the

conversations she had with Sweely before June 20, 1990, that Option 2 was

Sweely's actual choice, McWilliams advised the Petitioner to choose Option 2.

11. McWilliams testified that she discussed the matter with Sweely and

with the Petitioner in Sweely's presence on August 16, 1990. (It certainly is

possible that, had they discussed the matter with Sweely on August 16, 1990,

Sweely might have chosen Option 2 at that time.) But the Petitioner testified

that they did not discuss the matter with Sweely on August 16, 1990. The

Petitioner explained that, although Sweely was oriented and physically able to

write his name and, from time to time, was mentally lucid on that day, the

Petitioner did not think that Sweely was in a position to give full

consideration to the matter at the time they were discussing the forms because

he was on morphine, was lethargic, and was having difficulty breathing without a

non-rebreather mask. The Petitioner also did not think it was necessary to

trouble Sweely with the matter, since the Petitioner believed that the selection

of Option 2 on the Form FRS-11o was redundant and also that he was authorized to

execute the form for Sweely as his attorney-in-fact under a purported durable

power of attorney which Sweely executed on or about February 28, 1990,

authorizing the Petitoner to act in Sweely's behalf in all matters.

12. Under the circumstances on the afternoon of August 16, 1990, the

Petitioner did not think that Sweely would have wanted to be troubled with the

matter unnecessarily. He checked Option 2 and signed Sweely's name to the Form

FRS-11o.

13. On numerous previous occasions, the Petitioner had signed Sweely's

name on Sweely's personal checks to pay Sweely's bills. In doing so, the

Petitioner believed that he was acting properly under the authority of the

purported durable power of attorney, and the bank always honored the checks the

Petitioner signed this way. But on June 13, 1990, a physician insisted that the

Petitioner sign a Division of Retirement medical records release form FR-13b in

his own name as attorney-in-fact for Sweely. Himself not thinking well or

clearly under the circumstances, the Petitioner assumed that his signature on

the Form FRS-11o was valid.

14. The Petitioner testified that it did not occur to him that there were

notary services available for his use at the hospital. He testified that, after

checking Option 2 and signing the Form FRS-11o, he telephoned his father, who

was a notary, and asked him to come to the hospital to notarize something for

him. The Petitioner's father confirmed this and also confirmed the Petitioner's

testimony that they met in the hallway outside Sweely's hospital room, where the

Petitioner gave his father the signed form and asked him to notarize it. Both

testified that they did not discuss the form in any detail before the Petitioner

returned to Sweely's hospital room. The Petitioner's father testified that he

notarized the form thinking that Sweely had signed it.

15. Sweely died two days later on August 18, 1990.

CONCLUSIONS OF LAW

16. The Petitioner has the burden of proof in this case. See Balino v.

Dept. of Health, etc., 348 So. 2d 349 (Fla. 1st DCA 1977). As found, there was

no evidence that Sweely was unable to make informed decisions when he executed

Division of Retirement Form FR-13 on or about June 20, 1990. Nor did the

evidence prove that Sweely's choice of Option 1 was inadvertent error.

17. No facts were proven upon which the Division of Retirement could be

estopped from denying the Petitioner retirement benefits under Option 2. It is

well established that the doctrine of equitable estoppel is to be applied

against the State only rarely and in exceptional circumstances. See Dolphin

Outdoor Advertising . Dept. of Transp., 582 So. 2d 709 (Fla. 1st DCA 1991);

Dept. of Environmental Reg. v. C.P. Developers, 512 So. 2d 258 (Fla. 1st DCA

1987). Under Harris v. Dept. of Admin., 577 So. 2d 1363 (Fla. 1st DCA 1991),

the elements of equitable estoppel against a state agency are: (1) a

representation by an agent of the State as to a material fact that is contrary

to a later asserted position; (2) reasonable reliance on the representation; and

(3) a change in position detrimental to the party claiming the estoppel caused

by the representation and reliance. In this case, while there was some evidence

that, with respect to the language describing benefit options, the Division of

Retirement considered its FRS-11o "Option Selection Form for FRS Members" to be

an improvement over its Application for Disability Retirement Form FR-13 in use

on June 20, 1990. But it cannot be said that the information on the Form FR-13

constituted a misrepresentation. See also Section 121.091(6), Fla. Stat. (Supp.

1990), which refers to Option 1 as: "The maximum retirement benefit payable to

the member during his lifetime."

18. The facts now are clear that Sweely himself never chose to change from

Option 1 to Option 2. Whether a change from Option 1 to Option 2 is effective

depends on the validity of the Petitioner's change from Option 1 to Option 2 on

Sweely's behalf.

19. For three reasons, the Petitioner's attempt to change from Option 1 to

Option 2 on Sweely's behalf is invalid. First, the only durable power of

attorney available under Florida law before October 1, 1990, was the durable

family power of attorney, under which the donee of the power of attorney had to

be the spouse, brother, sister, niece, nephew or person related to the principal

by lineal consanguinity. Section 709.08, Fla. Stat. (1989); Section 24, Chapter

90-232, Laws of Florida (1990); Section 709.08, Fla. Stat. (Supp. 1990).

Second, the Petitioner did not sign the Form FRS-11o properly, i.e., in his own

name, as attorney-in-fact for Sweely. Instead, he signed Sweely's name. Third,

the form was not properly notarized. The Form FRS-11o requires that the member

sign in the presence of a notary and have the member's signature on the form

notarized. The form, together with the notarization requirement, has been

approved by rule. See F.A.C. Rule 60S-9.001(2)(p). As part of a form approved

by rule, the notarization requirement had the force and effect of law. Section

120.52(16), Fla. Stat. (1992). Under Section 117.09(1), Fla. Stat. (1989), a

notary had to "require reasonable proof of the identity of the person whose

signature is being notarized and such person must be in the presence of the

notary public at the time the signature is notarized." In this case, the notary

did not require reasonable proof, or even inquire, whether Sweely signed the

Form FRS-11o, and Sweely was not in the notary's presence when the document was

notarized.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

recommended that the Department of Management Services, Division of Retirement,

enter a final order: (1) that the purported selection, on the Form FRS-11o

dated August 16, 1990, of Option 2 for payment of Florida Retirement System

disability retirement benefits to Lon Emory Sweely, now deceased, and his

beneficiary, the Petitioner, Richard A. Castillo, Jr., was invalid and

ineffective; and (2) that the previous selection of Option 1 on the Form FR-13

executed on or about June 20, 1990, is valid and shall be given effect.

RECOMMENDED this 20th day of January, 1995, in Tallahassee, Florida.

___________________________________

J. LAWRENCE JOHNSTON

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of January, 1995.

APPENDIX TO RECOMMENDED ORDER

To comply with the requirements of Section 120.59(2), Fla. Stat. (1993),

the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1.-9. Accepted and incorporated to the extent not subordinate or

unnecessary.

10. Last sentence, rejected as not proven. Otherwise, accepted and

incorporated to the extent not subordinate or unnecessary.

11. Last sentence, rejected as subordinate to facts not proven and as

hearsay insufficient in itself to support a finding. (Taking as true that

Sweely made such a statement to the Petitioner, his actions were not in

accordance with the statement.) Otherwise, accepted and incorporated to the

extent not subordinate or unnecessary.

12.-14. Accepted and incorporated to the extent not subordinate or

unnecessary.

15. Last sentence, rejected as subordinate to facts not proven and as

hearsay insufficient in itself to support a finding. (Taking as true that

Sweely made such a statement to McWilliams, his actions were not in accordance

with the statement, and McWilliams also testified that Sweely tried to remain

"up-beat," thinking that this might extend his lifetime.) Otherwise, accepted

and incorporated to the extent not subordinate or unnecessary. (Specifically,

it was clear that Sweely wanted the Petitioner, and no one else, to be his sole

beneficiary and to be provided for after his death in the manner and to the

extent to which he decided.)

16. Last sentence, not proven (as to expression of "clear and unqualified

acknowledgment and understanding); also rejected as subordinate to facts not

proven and as hearsay insufficient in itself to support a finding. (Taking as

true that Sweely made such a statement to McWilliams, his actions were not in

accordance with the statement, and McWilliams also testified that Sweely tried

to remain "up-beat," thinking that this might extend his lifetime.) Otherwise,

accepted and incorporated to the extent not subordinate or unnecessary.

(Specifically, it was clear that Sweely wanted the Petitioner, and no one else,

to be his sole beneficiary and to be provided for after his death in the manner

and to the extent to which he decided.)

17.-30. Accepted and incorporated to the extent not subordinate or

unnecessary.

31. "Substantially," rejected as not proven. Otherwise, accepted and

incorporated to the extent not subordinate or unnecessary.

32.-35. Accepted and incorporated to the extent not subordinate or

unnecessary.

Respondent's Proposed Findings of Fact.

1.-7. Accepted and incorporated to the extent not subordinate or

unnecessary.

8. Ultimate and penultimate sentences, rejected in part as contrary to

facts found and to the greater weight of the evidence. (The evidence was that

the Patient Care Technician Records were prepared near the beginning of each

nursing shift and reflected conditions at that time. Meanwhile, there was

evidence that the patient's mental state would "wax" and "wane." When the

patient "waned" and was lethargic, it was difficult to communicate with him.

Changes during the course of a shift may or may not be noted in the Progress

Notes. While the Patient Care Technician Records indicate that the patient was

both oriented and lethargic, the 8 a.m. progress notes indicate "lethargic at

times." The progress notes also indicate that, earlier in the day, the patient

had difficulty breathing without the non-rebreather mask and that, by 2 p.m., he

was wearing the mask continuously. Even disregarding the possibility that the

morphine dosage was enough to affect his judgment, the patient's lethargy and

his difficulty breathing without the mask probably would have made it difficult

for him to communicate on legal matters on the afternoon of August 16, 1990.)

Otherwise, accepted and incorporated to the extent not subordinate or

unnecessary.

9. Ultimate and penultimate sentences, rejected in part as contrary to

facts found and to the greater weight of the evidence. (He did not allege that

Sweely could not communicate or write his name. He testified that he did not

think Sweely would have been able to think clearly or want to be troubled with

the form unnecessarily. He did not think he had to discuss it with Sweely or

have Sweely sign it.) Otherwise, accepted and incorporated to the extent not

subordinate or unnecessary.

10. Accepted and incorporated to the extent not subordinate or

unnecessary. However, Dr. Breen's curt medical evaluation of Sweely's general

medical condition on August 16, 1990, was not for the purpose of evaluating

whether it was possible or prudent to have him considering legal documents and

making important legal judgments. In addition, Dr. Breen saw the patient early

in the morning and would not have seen changes during the course of the day.

11.-12. Accepted and incorporated to the extent not subordinate or

unnecessary.

13. Rejected as contrary to the greater weight of the evidence that

Castillo, Jr., "insist[ed] that Sweely was incompetent, unable to provide or

receive meaningful communication on August 16--and could not execute the form

himself . . .." (Rather, he testified that he did not think Sweely would have

been able to think clearly or want to be troubled with the form unnecessarily.)

Otherwise, accepted and incorporated to the extent not subordinate or

unnecessary.

14.-16. Accepted and incorporated to the extent not subordinate or

unnecessary.

COPIES FURNISHED:

Keith F. Roberts, Esquire

201 North MacDill Avenue

Tampa, Florida 33609

Robert B. Button, Esquire

Department of Management Services

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

A. J. McMullian, III, Director

Department of Management Services

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

William H. Lindner, Secretary

Department of Management Services

Knight Building, Suite 307

Koger Executive Center

2737 Centerview Drive

Tallahassee, Florida 32399-0950

Paul A. Rowell, Esquire

General Counsel

Department of Management Services

Knight Building, Suite 312

Koger Executive Center

2737 Centerview Drive

Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the Department of Management Services,

Division of Retirement, written exceptions to this Recommended Order. All

agencies allow each party at least ten days in which to submit written

exceptions. Some agencies allow a larger period within which to submit written

exceptions. You should consult with the Department of Management Services,

Division of Retirement concerning its rules on the deadline for filing

exceptions to this Recommended Order.