01-001947 Marilyn Sholin vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Wednesday, August 22, 2001.

Summary: Deceased employee reasonably relied upon employer to provide correct form to change his insurance beneficiary. Government`s error in providing incorrect form will not void the rights of designated beneficiary to collect benefits.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARILYN SHOLIN , )

)

Petitioner , )

)

vs. ) Case No. 01-1947

)

DEPARTMENT OF MANAGEMENT SERVICES , )

DIVISION OF RETIREMENT , )

)

Respondent , )

)

and )

)

ELLEN DOBKIN , )

)

Intervenor. )

___________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on July 12, 2001, in Fort Lauderdale, Florida, before Florence

Snyder Rivas, a duly-designated Administrative Law Judge of the

Division of Administrative Hearings.

APPEARANCES

For Petitioner : Lawrence P. Zolot, Esquire

3864 Sheridan Street

Hollywood, Florida 33021

For Respondent : Thomas E. Wright, Esquire

Division of Retirement

Post Office Box 3900

Tallahassee, Florida

For Intervenor : Kenneth Dobkin, Esquire

Hunton & Williams

Bank of America Plaza, Suite 4100

Atlanta, Georgia 30308-2216

STATEMENT OF THE ISSUE

Whether a deceased state employee effectively named

Petitioner as his retirement beneficiary prior to his death.

PRELIMINARY STATEMENT

Petitioner, Marilyn Sholin (Sholin), requested the Division

of Retirement (Division), to remit deceased employee Larry

Baker's (Baker) accumulated Deferred Retirement Option Program

(DROP) contributions to her after his death. Baker was a

Florida Retirement System (FRS) member participating in DROP at

the time of his death. By letter dated March 12, 2001, the

Division denied her request and this proceeding timely followed.

At the final hearing, Sholin testified on her own behalf

and offered the testimony of Dorothy Cleveland of the Human

Resources Department of the Broward County Board of

Commissioners. Respondent presented without objection the

deposition testimony of Stanley Colvin, Benefits Administrator,

Bureau of Retired Payroll and Survivor Benefits. Sholin

submitted four exhibits, two of which were admitted over

objection. The Division submitted seven exhibits, all of which

were admitted without objection.

During the course of the final hearing, Ellen Dobkin was

granted intervention per an ore tenus motion to intervene.

No transcript of the proceedings has been filed. Proposed

Recommended Orders were timely filed on August 15, 2001, and

have been carefully considered in the preparation of this

Recommended Order.

FINDINGS OF FACT

1. At the time of his death on December 23, 2000, Baker

was a member of the FRS participating in DROP.

2. At all times material to this case, Baker's eligibility

for FRS and for DROP was predicated upon his employment by the

Broward County Board of County Commissioners.

3. At the time of Baker's death, his lawful beneficiary

was entitled to receive $27,561.66 in lump sum DROP benefits.

4. DROP commenced in 1998. Under the program, employees

eligible for retirement have the option to retire, while

continuing to report for their normal work day for a period of

time not to exceed five years from the date of their retirement.

5. Because he did in fact continue to report for duty each

day and to perform the same tasks as he had prior to his

enrollment in DROP, Baker considered himself to be an "active"

employee. However, upon his enrollment in DROP, Baker was

carried on the FRS books as a "retiree."

6. One of the differences between active employees and

DROP retirees is that the Division provides different forms to

be used for designating beneficiaries for state sponsored

insurance programs.

7. For example, Form FST-12 is the state-approved form

upon which DROP members are supposed to make desired changes in

beneficiary designations. A form known as BEN-001 is the state-

approved form upon which active employees are supposed to make

desired changes in beneficiary designations.

8. The FST -12 form is promulgated by the Bureau of

Retirement Calculation while the Enrollment Section of the Bureau

of Enrollment and Contributions is responsible for the BEN-001

form. Both bureaus are part of the Division.

9. The FST-12 form is required to be notarized.

10. The BEN-001 form does not require a notarization.

11. The Division's stated reason for requiring that the

FST-12 form be notarized is to enable it to verify the identity of

the person requesting changes. The Division states that forms

from active members are generally received by the Division from

the employer, who presumably knows its employees, and therefore it

is unnecessary for the Division to require notary verification for

active members.

12. Baker enrolled in DROP effective March 1, 1999.

13. At that time, Baker designated his then-girlfriend,

Ellen Dobkin (Dobkin) as his DROP beneficiary. Dobkin was also

Baker's primary beneficiary under the life insurance policy

provided to Baker by Broward County, as well as on the deferred

compensation plan in which Baker participated.

14. By October 2000, Baker had a new girlfriend, Sholin.

15. In October 2000 Baker acted to replace Dobkin with

Sholin as his beneficiary on all three of the employment-based

benefit programs in which he participated.

16. On or about October 24, 2000, Baker contacted Broward

County's personnel office for the purpose of obtaining and

completing the forms necessary to effect this beneficiary

change. He was successful in obtaining the proper documents and

effecting the desired beneficiary change as to the life

insurance and deferred compensation coverage.

17. With respect to the DROP program, the Broward County

personnel office mistakenly provided Baker a BEN-001 form,

rather than the approved FST-12.

18. Because the DROP program was so new, it was not

uncommon for personnel offices affiliated with FRS throughout

the state to make the mistake of providing an incorrect form to

persons wishing to make beneficiary changes subsequent to their

enrollment in DROP.

19. Baker reasonably relied upon the Broward County

personnel office to provide him with the form necessary to

effect his wishes with respect to his beneficiary.

20. Baker executed the BEN-001 provided by his employer in

good faith and with the intent to remove Dobkin as a beneficiary

and to replace her with Sholin.

21. Baker's BEN-001 was received by the Division on

October 31, 2000.

22. In the regular course of business, Baker's BEN-001 was

thereupon sent to Division staff responsible for processing

beneficiary forms for active members.

23. It is the Division's practice, when a form BEN-001 is

received, to examine the form to make sure that the correct form

has been properly completed. The purpose of this review is to

assure that mistakes are caught while the employee is still

alive and able to correct the mistake.

24. Upon review of the form submitted by Baker, Division

staff recognized that Baker was a DROP participant, thus

technically a retiree, but that he had executed the form

intended for use by active employees. Therefore, in the regular

course of business, his file was forwarded to a supervisor for

further action.

25. On approximately 100 prior occasions, the Division had

had occasion to notify DROP participants that, like Baker, had

used the BEN-001 form, rather than the approved FST-12 form, to

effect a beneficiary change. In each of those cases, the

employee was contacted by letter which explained the situation

and enclosed the correct FST-12 form. The employee then had the

opportunity to re-state his intentions with respect to his DROP

beneficiary on the approved form.

26. On December 13, 2000, a Division supervisor wrote to

Baker enclosing a Form FST-12 and advising him to execute that

form in order to effect the requested beneficiary change.

27. The letter was sent to Baker's address on file at the

time when Baker entered the DROP program. However, Baker had

since moved, and the letter did not reach Baker, who died on

December 23, 2000.

28. Upon consideration of the file, the Division denied

Sholin's claim for benefits, solely because Baker had used the

incorrect form to document his change of beneficiary.

CONCLUSIONS OF LAW

29. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto pursuant to Section 120.57 (1), Florida Statutes

(2000).

30. Petitioner has the burden of proving by a preponderance

of the evidence that she is entitled to be Baker's beneficiary.

See Section 120.57(1)(j) and (k), Florida Statutes ; Florida

Department of Transportation v. J.W.C. Co. , 396 So. 2d 778 (Fla.

1st DCA 1981) ; Balino v. Department of Health and Rehabilitative

Services , 348 So. 2d 349 (Fla. 1st DCA 1977); and Young v.

Department of Community Affairs , 625 So. 2d 831 (Fla. 1993).

31. Section 121.091(8)(a), Florida Statutes (2000),

provides in relevant part that "[E ] ach member (of FRS) may, on a

form provided for that purpose, . . . designate a choice of one

or more persons, . . . as his or her beneficiary. . . ."

32. Baker reasonably relied upon the BEN-001 form given him

by his personnel office as being the proper tool by which to

communicate to FRS his desire to change his DROP beneficiary

from Dobkin to Sholin. As far as Baker was concerned the form

he was given was a form "provided for [that] purpose" within the

meaning of Section 121.091(8), Florida Statutes (2000).

33. The Division's reliance upon Harrell v. Department of

Management Services, Division of Retirement , DOAH Case

No. 99-4056 (2000), is misplaced. As Judge Robert M. Meale

noted in the Recommended Order in that case, the overarching

purpose of Florida's retirement statutes is to assure the right

of the deceased employee ". . . to select a beneficiary of his

choice and to be assured that [the Division] will honor that

choice."

34. Here, the evidence establishes that Baker chose Sholin

as his beneficiary and reasonably relied upon his employer to

provide him with the correct form with which to document that

choice. The Division proposes not to honor Baker's choice

simply because he did not live long enough to receive and act

upon the Division's efforts to assist him to correct the

innocent mistake which it correctly suspected that he--like a

hundred employees before him--had made. The Division's position

places form over substance.

RECOMMENDATION

Based upon the foregoing findings of fact, and conclusions

of law, it is RECOMMENDED that the Division of Retirement enter

a Final Order granting Larry Baker's $27,561.66 DROP benefits to

Marilyn Sholin.

DONE AND ENTERED this 22nd day of August, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

FLORENCE SNYDER RIVAS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488- 9675 SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of August, 2001.

COPIES FURNISHED:

Lawrence P. Zolot, Esquire

3864 Sheridan Street

Hollywood, Florida 33021

Kenneth Dobkin, Esquire

Hunton & Williams

Bank of America Plaza, Suite 4100

Atlanta, Georgia 30308-2216

Thomas E. Wright, Esquire

Division of Retirement

Post Office Box 3900

Tallahassee, Florida 32399-1560

Erin Sjostrom, Director

Division of Retirement

Cedars Executive Building, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

Monesia Taylor Brown, Deputy General Counsel

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.