03-004412 Eric C. Eggen vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Thursday, April 1, 2004.

Summary: Petitioner does not fill a regularly established position such that mandatory inclusion to the Florida Retirement System is required.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ANTOINETTE MUNRO, )

)

Petitioner, )

)

vs. ) Case No. 03-4409

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

_________________________________)

ERIC EGGEN, )

)

Petitioner, )

)

vs. ) Case No. 03-4412

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice a formal hearing was held in these

consolidated cases on January 29, 2004, in Pensacola, Florida,

before J. D. Parrish, a designated Administrative Law Judge of

the Division of Administrative Hearings.

APPEARANCES

For Petitioners: George R. Mead, II, Esquire

Moore, Hill & Westmoreland, P.A.

SunTrust Tower, Ninth Floor

220 West Garden Street, Ninth Floor

Pensacola, Florida 32501

For Respondent: Thomas E. Wright, Esquire

Department of Management Services

Division of Retirement

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950

STATEMENT OF THE ISSUE

Whether the Petitioners are entitled to participate in the

Florida Retirement System (FRS).

PRELIMINARY STATEMENT

These cases were referred to the Division of Administrative

Hearings for formal proceedings based upon the Respondent's

preliminary finding and determination that the Petitioners,

Antoinette Munro and Eric Eggen, are not eligible to participate

in the FRS. The Petitioners timely challenged those

determinations. There are no disputed procedural issues

regarding those determinations.

At issue is whether the Petitioners should have been

included among officers or employees entitled to participate in

the FRS. Because of the relationship inherent in the working

circumstances of the individuals, the facts and legal issues

shared by the cases, and the common witnesses, the cases were

consolidated for hearing for the convenience of all parties.

Similarly, for convenience sake and to avoid the repetition of

findings that would prove identical to both cases, a single

Recommended Order is issued. Findings of fact unique to one or

the other Petitioner are clearly delineated. The employment

status of the Petitioner Eggen governs whether or not the

Petitioner Munro should be considered eligible. That is to say,

and the parties would agree, if Mr. Eggen is not eligible, then

Mrs. Munro cannot be deemed eligible to participate in the FRS.

Conversely, if Mr. Eggen is eligible, Mrs. Munro may also be

deemed eligible.

The parties do not agree as to the burden of proof in this

cause. The Petitioners maintained that once the prima facie case

of establishing Mr. Eggen an "officer" nor "employee" is

established, the burden shifts to the Respondent to prove he is

an "independent contractor." Because Mr. Eggen has not

established that he is an "officer" nor "employee," the issue of

whether or not the burden should shift is not addressed.

Essentially, Mr. Eggen is neither an officer or an employee

within the meaning of the Florida Statutes.

At hearing, in support of their contentions the Petitioners

testified in their own behalf and presented testimony from Deedra

Abernathy Benham. The Petitioners' Exhibits A through E were

admitted into evidence. The Respondent presented testimony from

Ellen Vickery and Cathy Smith. The Respondent's Exhibits 1-3, 7,

10-12, and 14-17 were also received in evidence.

The parties requested and official recognition has been

taken of the provisions of law as set forth in the record.

Portions of those provisions are included within this order.

The transcript of the proceedings was filed with the

Division of Administrative Hearings on February 17, 2004.

Thereafter the parties timely filed Proposed Recommended Orders

that have been fully considered in the preparation of this

Recommended Order.

FINDINGS OF FACT

1. The Respondent, Department of Management Services,

Division of Retirement (Respondent or Department), is the state

agency charged with the responsibility of administering the FRS.

Accordingly, the Respondent must resolve as part of its normal

course of duties whether or not individuals are eligible to

participate in the FRS.

2. The Petitioner, Eric Eggen, is an attorney authorized by

the Florida Bar to practice law within the State of Florida.

Mr. Eggen has practiced law since 1974.

3. On March 15, 1991, Mr. Eggen was appointed by the Chief

Judge of the First Circuit to serve as a "part time Child Support

Hearing Officer." Mr. Eggen was directed to perform such duties

as part of a program that coordinates the enforcement of child

support.

4. Although Florida's First Circuit encompasses more than

two counties, the vast majority of Mr. Eggen's work has been

performed for and funded primarily by Escambia County and Santa

Rosa County.

5. The child support program pertinent to these cases is a

federally funded program that channels monies from the federal

government to local governments through the State Department of

Revenue. Local governments are required to "match" a certain

percentage in order to receive the federal funds. In these

cases, the First Circuit (when the program was initiated) decided

to use non-Article V hearing officers to perform the work. This

process had been approved by the Florida Supreme Court and allows

the judges of the First Circuit more time to perform their other

responsibilities. Accordingly, for reasons not fully set forth

in this record, Mr. Eggen was selected to be the hearing officer

for the First Circuit child support enforcement program. How or

by whom Mr. Eggen would be compensated for his efforts was not

set forth by any written document. He was simply designated by

the Chief Judge to be the person who would do the work.

6. The work consisted of conducting child support hearings

to determine whether child support was owed, whether someone had

the ability to pay child support, and whether someone might be

willfully refusing to pay child support. Issues such as

paternity required an Article V judge. Mr. Eggen was not

authorized to make such determinations.

7. Initially the work was considered part-time, but as the

volume of cases increased over time Mr. Eggen's ability to

perform other legal work diminished. He maintains that the child

support enforcement work now consumes his full-time schedule.

Exactly when Mr. Eggen went to full-time work as a hearing

officer was not proved.

8. The contracts governing how monies are treated by

Escambia County and Santa Rosa County do not include any

specification regarding the Petitioners by name. Presumably any

individual performing Mr. Eggen's duties would be entitled to the

compensation he receives for the work performed. In fact, when

Mr. Eggen substitutes for another hearing officer he is similarly

compensated.

9. Mr. Eggen does not have a permanent office within the

court facilities, does not receive office supplies through the

court or county facilities, and does not have sick leave or

annual leave through any agency. When Mr. Eggen performs the

work, he is paid by submitting invoices to the counties for whom

the work is performed. Neither the First Circuit, the Court

Administrator's Office, nor the Department of Revenue pays

Mr. Eggen directly for the work performed. In remitting funds to

Mr. Eggen the counties do not deduct social security,

withholding, or any other amount such as medical insurance costs.

There is no evidence that Mr. Eggen receives any benefits such as

medical insurance, dental insurance, or deferred compensation

through any entity. Further, there is no evidence that those

types of benefits were made available to Mr. Eggen but declined

by him. Typically those types of benefits are available to full-

time state employees.

10. At all times prior to the initiation of these cases,

the Petitioner Eggen held himself out as "self-employed."

Mr. Eggen's work as a hearing officer did not preclude him from

representing private clients on matters not in conflict with his

role as the child support enforcement hearing officer. The

extent of Mr. Eggen's private practice before the volume of child

support enforcement hearings caused him to work full-time as a

hearing officer is not proved. Whether or not he could perform

other legal work at this time is also unknown.

11. The Petitioner Munro is a full-time employee of

Mr. Eggen. She is paid a salary and receives a W-2 from

Mr. Eggen. Her services to the child support enforcement program

are billed to the counties at a daily rate as "clerical

assistance." Mrs. Munro designates herself as a "judicial

assistant." Mr. Eggen uses monies from the paid county invoices

to partially fund Mrs. Munro's monthly wage.

12. Mrs. Munro was hired by Mr. Eggen in approximately

1975. No one from the counties, the Court Administrator's

Office, or the Judges of the First Circuit had any input to

Mr. Eggen's selection of Mrs. Munro. No one from those entities

can fire Mrs. Munro, discipline her, reward her, or pay her. Her

sole source of remuneration flows through Mr. Eggen.

13. How Mrs. Munro accounts for her work time to Mr. Eggen

was not proved. Neither Mr. Eggen nor Mrs. Munro is required to

account for time spent on child support cases to the Court

Administrator's Office, the Judges of the First Circuit, or the

Department of Revenue.

14. The Petitioners Eggen and Mrs. Munro set the hearing

schedule for the child support cases, coordinate the hearings

with court space available to conduct the cases, and complete the

paperwork associated with the cases at their own designated pace.

15. No one instructs Mr. Eggen as to when he must work, how

he must work, or whether he must work. If Mr. Eggen chose not to

work, he would not be paid. The completion of the work drives

the payments. No work and no invoice to counties would lead to

no compensation to Mr. Eggen. Whether Mrs. Munro would be paid

by Mr. Eggen under those circumstances was not proved.

16. Neither Petitioner is identified or specified as an

employee of the Court Administrator's Office.

17. Neither Petitioner is identified or specified as an

employee of the First Circuit.

18. Neither Petitioner is identified or specified as an

employee of the Department of Revenue.

19. Neither Petitioner holds a position or job

classification that has been identified, specified, or funded by

the Florida Legislature.

20. Prior to the initiation of this action, neither

Petitioner had ever publicly claimed to be a "state employee."

21. There is no evidence that either Petitioner received a

statement of benefits accrued from any state entity setting forth

the Petitioners' entitlements or declined benefits.

22. Whether or not any entity pays workers' compensation,

leave, or insurance benefits for the Petitioners was not proved.

There is no evidence that any state, court or county agency does

so.

23. The Court Administrator of the First Circuit is a state

agency as contemplated by Chapter 121, Florida Statutes.

24. When the Petitioners first believed they were entitled

to benefits as an "officer" or "state employees" was not proved.

Clearly, the first claim for FRS entitlement was not filed until

2001, some ten years after Mr. Eggen had been designated to do

the work as a child support enforcement hearing officer.

25. Other child support enforcement hearing officers who

are considered "state employees" for purposes of working through

the Court Administrator's Office are designated "OPS." As such,

those employees are not eligible to participate in the FRS nor do

they receive other benefits afforded to state employees.

CONCLUSIONS OF LAW

26. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of these

proceedings. §§ 120.569 and 120.57(1), Fla. Stat.

27. The FRS is set forth in Chapter 121 of the Florida

Statutes. The parties do not dispute the provisions of that law,

nor do they assert any difference in the interpretation of those

provisions. All acknowledge that employees of state agencies are

mandatory participants in the FRS.

28. Section 121.021(52)(a), Florida Statutes (2002),

defines a regularly established position as follows:

(a) In a state agency, the term means a

position which is authorized and established

pursuant to law and is compensated from a

salaries appropriation pursuant to §.

216.011(1)(dd), or an established position

which is authorized pursuant to §.

216.262(1)(a) and (b) and is compensated from

a salaries account as provided by rule.

29. Section 216.001(1)(dd), Florida Statutes (2002),

provides:

(dd) "Other personal services" means the

appropriation category used to fund the

compensation for services rendered by a

person who is not filling an established

position. This definition includes, but is

not limited to, services of temporary

employees, student or graduate assistants,

persons on fellowships, part-time academic

employees, board members, and consultants and

other services specifically budgeted by each

agency, or by the judicial branch, in this

category. In distinguishing between payments

to be made from salaries and benefits

appropriations and other-personal-services

appropriations:

1. Those persons filling established

positions shall be paid from salaries and

benefits appropriations and those persons

performing services for a state agency or for

the filling established positions, shall be

paid from other-personal-services

appropriation.

2. Those persons paid from salaries and

benefits appropriations shall be state

officers or employees and shall be eligible

for membership in a state retirement system

and those paid from other-personal-services

appropriations shall not be eligible for such

membership.

30. Section 2163262(1), Florida Statutes (2002), provides

in relevant part:

(1)(a) Unless otherwise expressly provided

by law, the total number of authorized

positions may not exceed the total provided

in the appropriations acts. In the event any

state agency or entity of the judicial

branch finds that the number of positions so

provided is not sufficient to administer its

authorized programs, it may file an

application with the Executive Office of the

Governor or the Chief Justice; and, is the

Executive Office of the Governor or Chief

Justice certifies that there are not

authorized positions available for addition,

deletion, or transfer within the agency as

provided in paragraph (c) and recommends an

increase in the number of positions, the

Governor or the Chief Justice may, after a

public hearing, authorize an increase in the

number of positions for the following reasons

only:

1. To implement or provide for continuing

federal grants or changes in grants not

previously anticipated;

2. To meet emergencies pursuant to Section

252.36;

3. To satisfy new federal regulations or

changes therein;

4. To take advantage of opportunities to

reduce operating expenditures or to increase

the revenues of the state or local

government; and

5. To authorize positions which were not

fixed by the Legislature through error in

drafting the appropriations acts.

The provisions of this paragraph are subject

to the notice and review procedures set forth

in Section 216.177. A copy of the

application, the certification, and the final

authorization shall be filed with the

Legislative Budget Commission, the

appropriations committees, and with the

Auditor General.

(b) The Governor and the Chief Justice may,

after a public hearing, delete supervisory or

managerial positions within a department and

establish direct service delivery positions

in excess of the number of supervisory or

managerial positions deleted. The salary

rate for all positions authorized under this

paragraph may not exceed the salary rate for

all positions deleted under this paragraph.

Positions affected by changes mad under this

paragraph may be funded only from identical

funding sources.

31. The crux of these cases is that the Petitioners claim

they should have been considered "employees" of the state for the

period from November 1, 1992 through the present. As a matter of

law, the Petitioner Eggen has failed to establish himself as

either an "officer" or an "employee" as those terms are defined.

Mr. Eggen is not subject to the control and direction of any

employer. Mr. Eggen works when he chooses to do so. For at

least a portion of the time claimed, Mr. Eggen did not even work

full-time on the child support enforcement cases. If he does not

work, he cannot submit invoices for payment. He has been

designated as someone who may do the work, but presumably only

his desire to receive payment for the work dictates when the work

is done and whether he gets paid. And when he does complete the

work, the invoice for the work is paid by the county, not a state

agency. Practically, if the Chief Judge sought to designate

someone else to do the work, Mr. Eggen would have little

recourse. He is not designated as a career service employee of

the state, he holds no established position of employment, and

the "at will" term of his ability to do the work merely suggests

that the "contract" could be extended to someone else.

32. Similarly, as a matter of law, the Petitioner Munro has

also failed to establish she is an employee of the state such

that she would be eligible for FRS benefits. Just as with

Mr. Eggen, there is no budgeted position that covers this

Petitioner. Neither the Supreme Court or the Court

Administrator's Office or the Department of Revenue or any other

state entity has listed Mrs. Munro as its employee. There is no

"regularly established position" this Petitioner fills. The

state has never issued a salary warrant to this Petitioner. All

wages to this employee were through Mr. Eggen's law practice. As

such she has established herself to be his employee. Her

employment benefits are determined by those available through his

law practice.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Management

Services, Division of Retirement, issue a Final Order denying

eligibility to these Petitioners.

DONE AND ENTERED this 1st day of April 2004, in Tallahassee,

Leon County, Florida.

S

___________________________________

J. D. Parrish

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1st day of April, 2004.

COPIES FURNISHED :

Sarabeth Snuggs, Interim Director

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

Alberto Dominguez, General Counsel

Division of Retirement

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-1560

Thomas E. Wright, Esquire

Department of Management Services

Division of Retirement

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399-0950

George R. Mead, II, Esquire

Moore, Hill & Westmoreland, P.A.

SunTrust Tower, Ninth Floor

220 West Garden Street

Pensacola, Florida 32501

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.