02-000213 Cheryl Walker vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Friday, October 4, 2002.

Summary: Petitioner failed to present sufficient evidence to show that mother was incompetent or suffering from emotional strain sufficient to influence her decisions on retirement or to prove equitable estoppel.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHERYL WALKER, )

)

Petitioner, )

)

vs. ) Case No. 02 - 0213

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

)

RECO MMENDED ORDER

Upon due notice, William R. Cave, an Administrative Law

Judge for the Division of Administrative Hearings, held a formal

hearing in this matter on July 24, 2002, in Winter Haven,

Florida.

APPEARANCES

For Petitioner: J. David Probjecky, Esquire

Post Office Drawer 7323

Winter Haven, Florida 33883 - 7323

For Respondent: Larry D. Scott, Esquire

Department of Management Services

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

Is Petitioner, Cheryl Walker, entitled to an Option Two

retirement benefit from the account of the deceased member, Mary

Fowler (Fowler), in the Florida Retiremen t System (FRS)?

PRELIMINARY STATEMENT

Fowler, a deceased member of the FRS, died on December 14,

1997, prior to her alleged termination date of December 31,

1997. Upon notification of Mary Fowler's death, The Division of

Retirement (Division) notified Fow ler's beneficiary, Cheryl

Walker, that since Fowler's termination was due to her death,

she had never effectively retired under the FRS and in the

absence of a spouse or dependent beneficiary, no monthly

benefits were payable. However, Cheryl Walker was a dvised by

the Division that she was eligible to receive a return of the

contributions made by Fowler to her account in the FRS. By a

Formal Verified Petition for Review dated December 27, 2001,

Petitioner challenged the Division's final agency decision

se rved on Petitioner on December 8, 2001.

At the hearing, Petitioner testified in her own behalf and

presented the testimony of Joyce Ann Pervis Kerce. Petitioner's

Exhibits 1 through 11 were admitted in evidence. The Division

presented the testimony of St anley Colvin. The Division's

Exhibits 1 through 12 were admitted in evidence. The parties

jointly presented the depositions of Christopher Berchelmann,

M.D., Victoria Spence, Robert S. Dezube, and Grace Burmeister in

lieu of their live testimony at the h earing. The parties also

jointly presented the deposition of Cheryl Walker. All of the

above depositions were admitted in evidence.

The Transcript of this proceeding was filed with the

Division of Administrative Hearings on August 19, 2002. By an

agreed upon motion the parties requested an extension of time

within which to file their Proposed Recommended Orders. By

order dated September 5, 2002, the parties were granted an

extension of time to file their Proposed Recommended Orders with

the understandin g that any time constraint imposed under Rule

28 - 106.216(1), Florida Administrative Code, was waived in

accordance with Rule 28.106.216(2), Florida Administrative Code.

The parties timely filed their Proposed Recommended Orders under

the extended time fra me.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence

adduced at the hearing, the following relevant findings of fact

are made:

1. On January 8, 1975, Fowler began employment with the

Clerk of the Circuit Court of Hillsborough Count y, Florida

(Clerk) as an Administrative Secretary.

2. On January 8, 1975, Fowler enrolled in the retirement

plan (Plan) that was being offered by the Clerk for her

position. Fowler made regular payments to the Plan and remained

current until the Clerk of fered the Plan as a benefit package

and paid the premiums on behalf of his employees. Fowler

purchased her previous years employment with the Neighborhood

Service Center for retirement purposes.

3. On September 29, 1997, Fowler, due to a serious health

c ondition took a medical leave of absence and went on no - pay

status. While on no - pay status Fowler's salary was reported for

creditable service in the FRS and the Clerk's office paid

Fowler's life and health insurance premiums except for certain

supplement al health and life insurance premiums.

4. On October 31, 1997, Dr. Greenberg advised Fowler that

she was suffering from terminal lung cancer and prescribed

certain pain medication.

5. At all times pertinent to this proceeding, Fowler was

eligible for re tirement with the FRS.

6. After Fowler was diagnosed as having terminal cancer,

Petitioner moved in with Fowler and Petitioner became her

caretaker.

7. Petitioner's testimony that she held a durable - family

power of attorney for Fowler and made all busine ss decisions for

Fowler after she was diagnosed with terminal cancer lacks

credibility based on Petitioner's own testimony and the

testimony of Grace Burmeister (Burmeister) and Victoria Spence

(Spence), both of whom worked with Fowler before her illness a nd

consulted with Fowler during her illness concerning her

retirement. Likewise, there is insufficient evidence to show

that Fowler advised the Clerk's office that Petitioner held a

durable - family power of attorney for her and that Petitioner

would be tak ing care of Fowler's business and business affairs.

Fowler was never declared incompetent, and there is no evidence

that she was incompetent to handle her own business affairs,

notwithstanding that she was taking treatment for the cancer and

taking pain m edication.

8. Sometime around November 3, 1997, Fowler notified the

Clerk's office that she was terminally ill and would not be

returning to work. At this time, Fowler was eligible for

retirement under the FRS.

9. On November 18, 1997, Petitioner talked to Burmeister

concerning Fowler making a change of beneficiary for FRS and for

life insurance benefits. Certain information concerning the

rights of joint annuitants and beneficiaries was provided to

Fowler by letter dated November 19, 1997.

10. On Nove mber 19, 1997, Burmeister, Spence, and Neva

Merckle, from the Clerk's office visited Fowler at her home and

provided Fowler with certain forms to be completed for her

retirement. Among those forms was a form to facilitate the

change of beneficiary which F owler completed and signed on

November 19, 1997, naming Petitioner as beneficiary for her

retirement benefits.

11. Also among the forms provided to Fowler by Burmeister

on November 19, 1997, was an Application for Service Retirement

(Application). The Ap plication was not completed by Fowler on

November 19, 1997, as she apparently had not decided on the

exact date for her retirement. In fact, Fowler, according to

Spence, did not appear be interested in retiring on November 19,

1997, but agreed to consider retiring.

12. Also at the meeting with Fowler at her residence on

November 19, 1997, both Burmeister and Spence advised Fowler,

among other things, that her date of retirement would occur on

the first day of the month following her date of termination an d

that should her death occur before her date of retirement then

there were serious consequences as far as the beneficiary was

concerned. One of those consequences was that since Fowler did

not have a joint annuitant, no one would receive the monthly

bene fit, except for monies Fowler had contributed to her

retirement in the FRS. Both Burmeister and Spence advised

Fowler to move forward immediately to set her date of

termination so that her date of retirement would occur on

December 1, 1997. Apparently, the comment expressed by

Petitioner that the Clerk's office was attempting to push Fowler

out the door had some impact on her decision not to fill out the

retirement application until later.

13. By letter dated December 2, 1997, Fowler gave the

Clerk form al notice of her intent to resign December 31, 1997,

for the primary purpose of retirement effective January 1, 1998.

14. Although Burmeister could not remember going to

Fowler's home but on one occasion, which was November 19, 1997,

Spence was very clear in her testimony that she and Burmeister

went to Fowler's home on two occasions to discuss Fowler's

retirement. Although Spence could not remember the exact dates

of their visits, apparently, the date of the second visit was on

December 3, 1997, when Fow ler completed and signed the

Application in the presence of Burmeister, who notarized the

Application, notwithstanding Petitioner's testimony to the

contrary, which lacks credibility in that regard.

15. Fowler selected Option 2, whereby she would receive a

slightly reduced benefit payable monthly for her lifetime.

However, should Fowler die before receiving 120 monthly

payments, her designated beneficiary, Cheryl Walker, would

receive the monthly benefit until the total number of monthly

benefits paid to Fowler and to Cheryl Walker equaled 120.

16. Fowler, either through documents furnished to her by

the Division concerning retirement or information furnished by

Burmeister during her visits on November 19, 1997, and

December 3, 1997, had available to her sufficient information

concerning retirement in order to make an intelligent decision

concerning, among other things, her date of termination, date of

retirement, and her Options.

17. The FRS received Fowler's Application on December 9,

1997. However, a n attempt to change the date of termination to

November 30, 1997, and thereby change the date of retirement to

December 1, 1997, was rejected by the FRS in that the FRS did

not recognize retroactive terminations.

18. Even though the Clerk's office was pa ying certain life

and health insurance premiums, there is no evidence that this

influenced Fowler's decision on retirement.

19. Fowler died on December 14, 1997, and was an active

member of the FRS at that time. Therefore, her termination date

was establ ished as the date of her death.

20. Fowler also changed her life insurance and deferred

compensation documents to name Cheryl Walker as the primary

beneficiary.

21. There is no provision in the FRS, nor is the FRS

funded to provide a "death benefit" for the beneficiary of an

active member who dies before the active member's effective

retirement date, unless the beneficiary is a spouse or dependent

beneficiary of the deceased member.

22. By letter dated January 29, 1998, the Division

notified Petitioner t hat since Fowler died before her retirement

date, the only benefit available to her was a refund of

retirement contributions paid by Fowler in the amount of

$3,811.98. The Division also advised Petitioner that in order

to receive the refund she would need to complete an application

for beneficiary refund. Petitioner completed and filed the

beneficiary refund application with the Division in February

1998. A warrant in the amount of $3,811.98 was mailed to

Petitioner, which she cashed on April 8, 1998.

23 . Subsequently, Petitioner unsuccessfully challenged the

Division's position and this proceeding ensued.

CONCLUSIONS OF LAW

24. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding pursuant t o Section 120.57(1), Florida Statutes.

25. Subsections 121.021(28)(a) and (b), (39)(a), (41), and

(46), Florida Statutes, provide in pertinent part as follows:

(28) "Joint annuitant" means any person

designated by the member to receive a

retirement ben efit upon the member's death

who is:

(a) The spouse of the member;

(b) The member's natural or adopted child

who is under the age of 25, or is physically

or mentally disabled and incapable of self -

support, regardless of age; . . . .

(39) (a) "Ter mination" occurs, except as

provided in paragraph (b), when a member

ceases all employment relationships with

employers under this system, as defined in

subsection (10), . . . .

(41) "Effective date of retirement" means

the first day of the month in wh ich payments

begin to accrue pursuant to s. 121.091.

(46) "Beneficiary" means the joint

annuitant or any other person, organization,

estate, or trust fund designated by the

member to receive a retirement benefit, if

any, which may be payable upon the m ember's

death.

26. Fowler applied for service retirement benefits from

FRS by Application dated December 3, 1997, which was received by

the FRS on December 9, 1997, wherein Fowler chose December 31,

1997, as her date of termination. Therefore, in accordance with

Rule 60S - 4.0035(3)(a), Florida Administrative Code, January 1,

1998, would have been established as Fowler's effective date of

retirement. However, Fowler died on December 14, 1997.

27. Subsection 121.091(7)(b)2., Florida Statutes, p rovide

in pertinent part as follows:

(7) DEATH BENEFITS. -

* * *

(b) If the employment of an active member

who may or may not have applied for

retirement is terminated by reason of his or

her death subsequent to becoming vested and

prior to his or h er effective date of

retirement, if established, it shall be

assumed that the member retired as of the

date of death in accordance with subsection

(1) if eligible for normal retirement

benefits, . . . Benefits payable to the

designated beneficiary shall be as follows:

* * *

2. For a beneficiary who does not qualify

as a joint annuitant, no continuing monthly

benefit shall be paid and the beneficiary

shall be entitled only to the return of the

member's personal contributions. . . .

28. Petitioner does not come within the definition of a

joint annuitant, and Petitioner does not contend that she is

eligible for benefits as a joint annuitant. However, Petitioner

contends, among other things, that Fowler was incompetent to

make a rational, intelligen t decision concerning her retirement

due to her illness. While Fowler may have been on an emotional

strain due to her illness, this is no evidence that Fowler was

incompetent to make decisions concerning her retirement.

Likewise, there is insufficient ev idence to establish facts to

show that whatever emotional strain Fowler was under at the time

had any effect on her decisions concerning her retirement.

29. Petitioner contends that the Division failed to

consider the case of O'Connell v. Department of Administration,

Division of Retirement , 557 So. 2d 609 (Fla. 3rd DCA 1990),

which held that although a member did not live to his effective

retirement date, his beneficiaries were entitled to a benefit

because the statute did not impose an "effective re tirement date

requirement." Subsequent to O'Connell , the Legislature enacted

legislation to provide a definition of effective retirement date

and to add the requirements that a member must terminate

employment and must file an application in the manner pr escribed

by the Division. See: Subsections 121.021(41) and 121.091,

Florida Statutes.

30. Petitioner also attempts to base her claim on the

theory of "equitable estoppel" and cites the case of Kuge v.

Department of Administration, Division of Retire ment , 449 So. 2d

389 (Fla. 3d DCA 1984). However, Petitioner has failed to

establish facts to prove the elements of "equitable estoppel"

against the Division.

31. The burden of proof is on the party asserting the

affirmative of an issue before an admini strative tribunal,

Florida Department of Transportation v. J.W.C. Company, Inc. ,

396 So. 2d 778 (Fla. 1st DCA 1981). Petitioner has the burden

of proof in this proceeding. To meet this burden, Petitioner

must establish facts upon which her allegations a re based by a

preponderance of the evidence. Department of Banking and

Finance, Division of Securities and Investor Protection v.

Osborne Stern and Company , 670 So. 2d 932 (Fla. 1996), and

Subsection 120.57(1)(j), Florida Statutes (2001). Petitioner

has failed to meet her burden.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is recommended that the Division of Retirement enter a

final order finding Petitioner, Cheryl Walker not eligible for

an Option 2 benefit from the account of Mary Fowler.

DONE AND ENTERED this 4th day of October, 2002, in

Tallahassee, Leon County, Florida.

___________________________________

WILLIAM R. CAVE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalach ee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 4th day of October, 2002.

COPIES FURNISHED :

J. David Pobjec ky, Esquire

Post Office Drawer 7323

Winter Haven, Florida 33883 - 7323

Larry D. Scott, Esquire

Department of Management Services

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399 - 0950

Erin Sjostrom, Director

Division of Retirement

Department of Ma nagement Services

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399 - 1560

Monesia Taylor Brown, Acting General Counsel

Division of Retirement

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399 - 1560

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit 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.