03-002525 Carol Johns vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Thursday, September 25, 2003.

Summary: Petitioner failed to prove entitlement to Deferred Option Retirement Plan retroactive to October 1, 2001, because she did not submit her application until May 2002. Petitioner failed to prove the elements of equitable estoppel against the Division.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAROL JOHNS, )

)

Petitioner, )

)

vs. ) Case No. 03 - 2525

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDE R

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

on September 4, 2003, by video teleconference, with the parties

appearing in Fort Lauderdale, Florida, before Patricia Hart

Malono, a duly - designated Administrative Law Judge of the

Division of Administrative Hearings, who presided in

Tallahassee, Florida.

APPEARANCES

For Petitioner: Kenneth R. Harrison, Esquire

Sugarman & Susskind, P.A.

2801 Ponce de Leon Boulevard, Suite 750

Coral Gables, Florida 33134

For Respondent: Larry D. Scott, Esquire

Department of Management Services

Office of General Counsel

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

Whether the Petitioner is entitled to participate in the

Deferred Retirement Option Plan ("DROP") for 60 months.

PRELIMINARY STATEMENT

In a letter dated January 6, 2003, the Department of

Managemen t Services, Division of Retirement ("Division"),

notified Carol Johns that her request to be allowed retroactive

participation in the DROP for five years beginning October 1,

2001, was denied. On February 4, 2003, Ms. Johns filed with the

Division a forma l petition for an administrative hearing in

which she set forth disputed issues of fact. The Division

forwarded the matter to the Division of Administrative Hearings

for assignment of an administrative law judge on July 11, 2003.

By notice, the formal he aring was held on September 4, 2003.

At the hearing, Ms. Johns testified in her own behalf, and

Petitioner's Exhibits 1 through 4 were offered and received into

evidence. The Division presented the testimony of Cathy Smith

and Douglas Cherry, and Responde nt's Exhibits 1 through 9 were

offered and received into evidence. Official recognition was

granted to Section 121.021(11), (12), and (22), Florida Statutes

(1971); Section 121.051, Florida Statutes (1971); and Florida

Administrative Code Rule 22B - 6 (1971 ).

No transcript of the proceedings was filed with the

Division of Administrative Hearings. The parties timely filed

proposed findings of fact and conclusions of law, which have

been considered in the preparation of this Recommended Order.

FINDINGS OF FAC T

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

following findings of fact are made:

1. The Division is the state agency charged with providing

retirement services to members of the Florida Retirement System

("FRS"). Section 121.1905, Florida Statutes (2002). 1

2. Ms. Johns was born on May 15, 1942.

3. On October 1, 1971, Ms. Johns began working for the

Broward County School Board as a part - time teacher in the adult

education p rogram. She taught two nights per week during the

1971 - 1972 school year and was paid a total salary of $1545.63.

She was not under contract with the Broward County School Board,

nor did she receive any benefits associated with her employment.

The Browar d County School Board does not have records

documenting the type of salary account from which Ms. Johns was

paid for her part - time employment during this period.

4. On February 5, 1972, Ms. Johns completed an FRS Florida

Teachers' Retirement System enroll ment card showing that

October 1, 1971, was the date her service with the Broward

County School Board began. The Broward County School Board made

contributions to the FRS on Ms. Johns' behalf during the 1971 -

1972 school year in the amount of $61.83.

5. M s. Johns was hired as a full - time teacher by the

Broward County School Board in August 1972, and she is currently

employed with the Broward County School Board under the DROP as

an assistant principal. Ms. Johns was not given any credit by

the Broward Cou nty School Board for her previous part - time

teaching experience, and she began her full - time teaching career

in August 1972 as a beginning teacher.

6. In 1997, Ms. Johns requested that the Division send her

an estimate of her retirement benefit if she wer e to retire

effective July 1, 1999. The Division prepared an Estimate of

Retirement Benefit, Form FRS - 40, which showed that, if Ms. Johns

were to retire effective July 1, 1999, she would have

27.90 years of service for purposes of calculating her

retireme nt benefits under the FRS. This estimate included 0.9

years of service attributed to Ms. Johns for the 1971 - 1972

school year. 2

7. A Summary of the Florida Retirement System Deferred

Retirement Option Program was enclosed with the December 29,

1997, Form FRS - 40, which included the following information:

"Participation Limit: Maximum of 60 months following the date

on which the member first reaches normal retirement age or

date."

8. The Form FRS - 40 was mailed to Ms. Johns on February 3,

1998, at "1131 SW 72nd Ave., Plantation, Florida 33317," which

was, and still is, her correct address. The Form FRS - 40 was not

returned to the Division as undeliverable or undelivered.

9. In 2000, Ms. Johns requested that the Division send her

an estimate of her retirem ent benefit if she were to retire

effective July 1, 2002. Two Estimate of Retirement Benefit

forms were prepared by the Division pursuant to this request:

Estimate #1 was based on the assumption that Ms. Johns would

retire on October 1, 2001, which was i dentified in the comments

included on the Estimate of Retirement Benefit form as her

earliest date of eligibility for normal retirement and for

participation in the DROP; it was noted on the form that the

estimate of benefits as of October 1, 2001, was bas ed on

30.08 years of service. Estimate #2 assumed the July 1, 2002,

retirement date specified in Ms. Johns' request for an estimate;

it was noted on the form that the estimate of benefits as of

July 1, 2002, was based on 30.90 years of service.

10. The t wo Estimate of Retirement Benefit forms were

mailed to Ms. Johns at "1131 SW 72nd Ave., Plantation, Florida

33317." Although the exact date the estimates were sent is not

shown on the documents, the Division keeps a computer log which

shows that Ms. John s' file was archived on January 1, 2001, and

that the two estimates were included in her file when it was

archived. The estimates were not returned to the Division as

undeliverable or undelivered.

11. Ms. Johns received a Member Annual Statement as of

Ju ne 30, 2001 from the Division showing that she had 29.90 years

of service in the FRS as of that date. The statement included

an alternative estimate based on Ms. Johns' continuing her

employment until July 1, 2002, and it was noted on the statement

that, should she retire on July 1, 2002, her monthly benefit

would be based on 30.9 years of creditable service. This annual

statement was mailed in the fall of 2001 to Ms. Johns at

"1131 SW 72nd Ave., Plantation, Florida 33317."

12. Ms. Johns' Application fo r Service Retirement and the

Deferred Retirement Option Program was received by the Division

on May 14, 2002. In her application, Ms. Johns identified her

DROP "begin date" as July 1, 2002, and her DROP "termination and

resignation date" as June 30, 2007. She acknowledged by signing

the form that her "DROP participation cannot exceed a maximum of

60 months from the date I first reach my normal retirement date

as determined by the Division of Retirement."

13. Ms. Johns planned her DROP "begin date" based on the

information provided by the Broward County School Board that,

according to its records, Ms. Johns' first day of employment was

August 17, 2002.

14. The Division acknowledged receipt of Ms. Johns' DROP

application by letter dated May 17, 2002, confi rming that her

DROP "begin date" was July 2002 and that her DROP "end date" was

June 30, 2007. An Estimate of Retirement Benefit form was

enclosed, which showed 30.90 years of service as of July 1,

2002. A DROP Estimated Benefit Accrual Calculation was a lso

enclosed, which showed the monthly - benefit accrual from

July 2002 through June 2007.

15. A revised Estimate of Retirement Benefit form was

prepared by the Division and mailed to Ms. Johns in August 2002.

Ms. Johns was advised in the comments on the r evised form that

she would be eligible to participate in the DROP for a maximum

of 50 months because her normal retirement date was September 1,

2001, and she had not entered the DROP until July 1, 2002.

16. Ms. Johns wrote a letter to the Division questi oning

the accuracy of the information contained in the revised

Estimate of Benefit form. Doug Cherry, the Benefits

Administrator for the Division's Bureau of Retirement

Calculations, advised Ms. Johns in a letter dated October 9,

2002, that, according to the Division's records, the date on

which she first became eligible for normal retirement and the

DROP was October 1, 2001. Mr. Cherry also stated in his letter

that, because her application for the DROP had been received in

May 2002, she would be eligibl e for the DROP effective May 1,

2002, rather than July 1, 2002, as she had specified in her

application.

17. When determining a person's membership in the FRS, the

Division looks to the law in effect at the time the service was

rendered. When Ms. Johns b egan her service with the Broward

County School Board in October 1971, Section 121.051, Florida

Statutes (1971), provided:

(1) COMPULSORY PARTICIPATION. --

The provisions of this law [the Florida

retirement system act] shall be compulsory

as to all officer s and employees who are

employed on or after December 1, 1970, of an

employer other than those referred to in

paragraph (2)(b), [ 3 ] and each officer or

employee, as a condition of employment,

shall become a member of the system as of

his date of employment.

Section 121.021(11), Florida Statutes (1971), defined "officer

or employee" in pertinent part as "any person receiving salary

payments for work performed in a regularly established

position." Section 121.021(12), Florida Statutes (1971),

defined "member " in pertinent part as "any officer or employee

who is covered or who becomes covered under this system in

accordance with this chapter." "Regularly established position"

was defined in the 1971 version of Florida Administrative Code

Rule 22B - 6(36) as "an y position authorized in an employer's

approved budget or amendments thereto for which salary funds are

specifically appropriated to pay the salary of that position."

Summary

18. The evidence presented is sufficient to establish that

Ms. Johns became a m ember of the FRS effective October 1, 1971,

and that her normal retirement date was October 1, 2001, at

which time her age was 59 years, five months.

19. The evidence presented is sufficient to establish

that, in choosing the date on which she would enter the DROP,

Ms. Johns relied on the information received from the Broward

County School Board and not on the information provided by the

Division.

20. The evidence presented is sufficient to establish that

the Estimate of Benefits forms sent to Ms. Johns b y the Division

in February 1998 and in late December 2000, and the Member

Annual Statement as of June 30, 2001, each included a statement

of the exact number of years of service calculated by the

Division for various dates of retirement. Ms. Johns was on

notice, therefore, of an inconsistency between the Division's

calculations of her years of service in the FRS and the

information provided by the Broward County School Board setting

her first date of employment as August 17, 1972. 4

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2003).

22. Section 121.021(29), Florida Statutes, provides in

per tinent part:

"Normal retirement date" means the first day

of any month following the date a member

attains one of the following statuses:

(a) If a Regular Class member, the member:

1. Completes 6 or more years of creditable

service and attains age 62; or

2. Completes 30 years of creditable

service, regardless of age, which may

include a maximum of 4 years of military

service credit as long as such credit is not

claimed under any other system.

23. Section 121.091, Florida Statutes, provides in

pertin ent part:

13) DEFERRED RETIREMENT OPTION PROGRAM. -- In

general, and subject to the provisions of

this section, the Deferred Retirement Option

Program, hereinafter referred to as the

DROP, is a program under which an eligible

member of the Florida Retiremen t System may

elect to participate, deferring receipt of

retirement benefits while continuing

employment with his or her Florida

Retirement System employer. The deferred

monthly benefits shall accrue in the System

Trust Fund on behalf of the participant,

p lus interest compounded monthly, for the

specified period of the DROP participation,

as provided in paragraph (c). Upon

termination of employment, the participant

shall receive the total DROP benefits and

begin to receive the previously determined

normal retirement benefits. Participation

in the DROP does not guarantee employment

for the specified period of DROP.

(a) Eligibility of member to participate in

the DROP. -- All active Florida Retirement

System members in a regularly established

position, and a ll active members of either

the Teachers' Retirement System established

in chapter 238 or the State and County

Officers' and Employees' Retirement System

established in chapter 122 which systems are

consolidated within the Florida Retirement

System under s . 121.011, are eligible to

elect participation in the DROP provided

that

1. The member is not a renewed member of

the Florida Retirement System under

s. 121.122, or a member of the State

Community College System Optional Retirement

Program under s. 121.0 51, the Senior

Management Service Optional Annuity Program

under s. 121.055, or the optional retirement

program for the State University System

under s. 121.35.

2. Except as provided in subparagraph 6.,

election to participate is made within

12 months im mediately following the date on

which the member first reaches normal

retirement date, or, for a member who

reaches normal retirement date based on

service before he or she reaches age 62, or

age 55 for Special Risk Class members,

election to participate m ay be deferred to

the 12 months immediately following the date

the member attains 57, or age 52 for Special

Risk Class members. For a member who first

reached normal retirement date or the

deferred eligibility date described above

prior to the effective d ate of this section,

election to participate shall be made within

12 months after the effective date of this

section. A member who fails to make an

election within such 12 - month limitation

period shall forfeit all rights to

participate in the DROP. The m ember shall

advise his or her employer and the division

in writing of the date on which the DROP

shall begin. Such beginning date may be

subsequent to the 12 - month election period,

but must be within the 60 - month limitation

period as provided in subparagr aph (b)1.

When establishing eligibility of the member

to participate in the DROP for the 60 - month

maximum participation period, the member may

elect to include or exclude any optional

service credit purchased by the member from

the total service used to e stablish the

normal retirement date. A member with dual

normal retirement dates shall be eligible to

elect to participate in DROP within

12 months after attaining normal retirement

date in either class.

* * *

b) Participation in the DROP. --

1. An eli gible member may elect to

participate in the DROP for a period not to

exceed a maximum of 60 calendar months

immediately following the date on which the

member first reaches his or her normal

retirement date or the date to which he or

she is eligible to de fer his or her election

to participate as provided in subparagraph

(a)2. However, a member who has reached

normal retirement date prior to the

effective date of the DROP shall be eligible

to participate in the DROP for a period of

time not to exceed 60 ca lendar months

immediately following the effective date of

the DROP . . . .

24. Ms. Johns has the burden of proving by a preponderance

of the evidence that she is entitled to participate in the DROP

for the entire 60 - month maximum period established in

Se ction 121.091(13)(b)1. See Section 120.57(1)(j), Florida

Statutes (2003); Florida Dep't of Transp. v. J.W.C. Co., Inc. ,

396 So.2d 778, 788 (Fla. 1st DCA 1981)(" In accordance with the

general rule, applicable in court proceedings, 'the burden of

proof, apa rt from statute, is on the party asserting the

affirmative of an issue before an administrative tribunal.'

Balino v. Department of Health & Rehabilitative Serv. , 348

So. 2d 349 (Fla. 1st DCA 1977)."); accord Young v. Department of

Community Affairs , 625 S o. 2d 831 (Fla. 1993).

25. Based on the findings of fact herein, Ms. Johns'

normal retirement date was October 1, 2001. Pursuant to the

express terms of Section 121.091(13)(b)1., she is entitled to

participate in the DROP only through September 30, 2006, or for

a total of 53 months, because she did not submit her application

for the DROP until May 2002, seven months after she reached her

normal retirement date.

26. Ms. Johns asserts, however, that the Division is

estopped from denying her the full 60 - mon th maximum

participation in the DROP pursuant to the doctrine of equitable

estoppel. The doctrine of equitable estoppel is applicable to

state agencies, and the elements that must be proven against the

state are:

"1) a representation as to a material fact

that is contrary to a later - asserted

position;

2) reliance on that representation; and

3) a change in position detrimental to the

party claiming estoppel, caused by the

representation and reliance thereon."

Kuge v. Department of Admin., Div. of Retiremen t , 449 So. 2d

389, 391 (Fla. 3d DCA 1984)(quoting Department of Revenue v.

Anderson , 403 So. 2d 397, 400 (Fla. 1981)).

27. Based on the findings of fact herein, Ms. Johns has

failed to establish that the Division changed its position with

respect to her y ears of service in the FRS or that she relied to

her detriment on any information provided by the Division.

28. Rather, Ms. Johns relied on information provided by

the Broward County School Board in calculating that her normal

retirement date was July 1, 2002, and not on information

provided by the Division. Even assuming that Ms. Johns received

only the Member Annual Statement sent her by the Division in the

fall of 2001, that statement clearly stated that, as of June 30,

2001, she had accumulated 29.90 years of service in the FRS.

And, although the Division accepted Ms. Johns' DROP application

in May 2002, provided her with an Estimate of Benefit form

including a calculation of DROP benefits from July 2002 through

June 2006, began paying her DROP benefi ts effective July 2002,

and did not notify her until August 2002 that she was not

entitled to participate in the DROP for the full 60 months,

Ms. Johns did not change her position in reliance on the

Division's actions because they took place after she had

submitted her application for DROP.

29. Ms. Johns also claims that the doctrine of equitable

tolling set forth in Machules v. Department of Administration ,

523 So. 2d 1132 (Fla. 1988), is applicable to her case to excuse

her application for the DROP seven months after her first date

of eligibility. Based on the findings of fact herein, Ms. Johns

has not established that the Division "lulled her into inaction"

or otherwise caused her to delay filing her application. Id.

at 1134.

RECOMMENDATION

Based on t he foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Management

Services, Division of Retirement, enter a final order finding

that Carol Johns is entitled to participate in the DROP for the

period extending from Ma y 1, 2002, through September 30, 2006.

DONE AND ENTERED this 25th day of September, 2003, in

Tallahassee, Leon County, Florida.

S

___________________________________

PATRICIA HART MALONO

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 (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 25th day of September, 2003.

ENDNOTES

1 / References to Florida Statutes are to the 2002 edition unless

otherwise noted.

2 / A normal 10 - month school year for instructional and

administrative personnel employed by the school boards in

Florida is considered one year of service. Because Ms. Johns

worked only 9 months during the 1971 - 1972 school year, she was

credited with 0.9 years of service.

3 / This exclusion does not apply to the Broward County School

Board.

4 / Ms. Johns testified that she kept everything sent to her by

the Division and that she did not receive the Estimate of

Retirement Benefit forms sent in February 1998 and in late

December 2000, in response to her requests. She testified that

she did, however, receive the June 2001 Member Annual Statement,

as well as the Division's acknowledgement that it had received

her DROP application; the revised Estimate of Retirement Benefit

form sent in August 2002; the letter of October 9, 2002, from

Doug Cherry; and the January 6, 2003, letter notifying her of

the Division's decision to deny her request for retroactive

participation in the DROP. The documents that Ms. Johns denies

receiving carry the same address as the documents that Ms. Johns

acknowledges receiving.

Ms. Johns referred in her testimony to t he incorrect

address shown on a letter sent to her by Ms. Smith dated on

May 15, 2003, and on a letter sent to her by counsel for the

Division in June 2003. See Respondent's Exhibit 8 and

Petitioner's Exhibit 4. She suggested that the Estimate of

Retirem ent Benefit forms could also have been sent to an

incorrect address. This suggestion is rejected for three

reasons: First, unlike the May and June 2003 letters, the

address on the fact of all of these other materials sent from

the Division was Ms. Johns' correct address; second, Ms. Johns

testified that she eventually received both the letter from

Ms. Smith and the letter from the Division's counsel; third, the

Estimate of Benefit forms were not returned to the Division.

Consideration has been given to all of the evidence

presented with respect to this issue, and it is concluded that

Ms. Johns' testimony that she did not receive two crucial

documents that she requested from the Division is not sufficient

to overcome the presumption of mailing describ ed by the Florida

Supreme Court in Brown v. Giffen Industries, Inc. , 281 So. 2d

897, 900 (Fla. 1973)(on rehearing):

Recognizing that a requirement of proof on

such an issue [the act of mailing a

particular letter] would place an impossible

burden on any b usiness, a general

presumption has arisen in the courts that

the ordinary course of business or conduct

was followed in a particular case absent a

contrary showing. . . . It follows, by

another equally broad presumption, that mail

properly addressed, stamp ed, and mailed was

received by the addressee . . . , and proof

of general office practice satisfied the

requirement of showing due mailing.

(Citations omitted.) See also Section 90.406, Florida Statutes;

Camerota v. Kaufman , 666 So. 2d 1042, 1045 (Fla. 4 th DCA

1996)(explaining that "[w]hen documents are mailed to an

addressee, there is a presumption of receipt" that may be

rebutted by evidence presented at a hearing).

COPIES FURNISHED:

Kenneth R. Harrison, Sr., Esquire

Sugarman & Susskind, P.A.

Suite 750

2801 Ponce de Leo n Boulevard

Coral Gables, Florida 33134

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 Management Services

Cedars Exe cutive 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 T O 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.