03-000417 Richard S. Mitchell vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Monday, March 31, 2003.

Summary: Florida Retirement System member, who had 7.10 years of creditable service when he stopped working in July of 2000, was not "vested" and therefore not entitled to receive retirement benefits.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RICHARD S. MITCHELL, )

)

Petitioner, )

)

vs. ) Case No. 03 - 0417

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursu ant to notice, a hearing was conducted in this case

pursuant to Section 120.569, Florida Statutes, and Subsection

(1) of Section 120.57, Florida Statutes, on March 18, 2003, in

Miami, Florida, before Stuart M. Lerner, a duly - designated

Administrative Law J udge of the Division of Administrative

Hearings (DOAH).

APPEARANCES

For Petitioner: Richard S. Mitchell, pro se

7931 Northwest 169th Terrace

Miami Lakes, Florida 33016

For Respondent: Thomas E. Wright, Esquire

Department of Management Services

4050 Esplanade Way, Suite 260

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

Whether Petitioner is "vested," as that term is defined in

Subsection (45 ) of Section 121.021, Florida Statutes.

PRELIMINARY STATEMENT

By letter dated December 18, 2002, the Division of

Retirement (Division) advised Petitioner, in response to

Petitioner's inquiry, that, notwithstanding that Petitioner had

more than six years of creditable service with a Florida

Retirement System (FRS) employer, Petitioner was not "vested,"

within the meaning of Subsection (45) of Section 121.021,

Florida Statutes, because he had not been "employed in a

regularly established position on July 1, 2 001," nor had he been

"employed in a covered position for at least 1 work year after

July 1, 2001." Petitioner, thereafter, submitted to the

Division a letter in which he indicated his desire to "appeal

th[is] decision" by the Division. On February 6, 20 03, the

matter was referred to DOAH for the assignment of an

Administrative Law Judge "for the purpose of disposing" of

Petitioner's "appeal."

As noted above, the final hearing in this case was held on

March 18, 2003. Two witnesses testified at the hearin g:

Petitioner and Doug Cherry, the Division's Benefits

Administrator. In addition to Petitioner's and Mr. Cherry's

testimony, nine exhibits (Petitioner's Exhibit 1 and

Respondent's Exhibits 1 through 8) were offered, and ultimately

received, into evidenc e.

At the close of the evidentiary portion of the final

hearing, a March 28, 2003, deadline was established for the

filing of proposed recommended orders.

On March 28, 2003, the Division filed a Proposed

Recommended Order, which the undersigned has car efully

considered. To date, Petitioner has not filed any post - hearing

submittal.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record

as a whole, the following findings of fact are made:

1. Prior to July of 2000, Petitioner worked on a permanent

part - time basis as an adult education teacher for the Miami - Dade

County School Board (School Board), accumulating 7.10 years of

retirement credit.

2. On Sunday, July 2, 2000, Petitioner was hospitalized

because of a "blood disorder."

3. S ince his hospitalization on July 2, 2000, Petitioner

has been under a doctor's care and has not been physically able

to return, and therefore has not returned, to work.

4. Petitioner was hospitalized again in 2001 and for a

third time in 2002 for the sa me ailment.

5. After each visit he has made to the doctor during the

time he has been out of work, Petitioner has apprised the

principal of the South Dade Adult Education Center (South Dade),

where he had worked before his July 2, 2000, hospitalization, of

his condition.

6. It is now, and has been at all times following his

July 2, 2000, hospitalization, Petitioner's intention "to return

to work upon clearance from [his] doctor."

7. Petitioner has not been paid by the School Board during

the time he h as been out of work.

8. In April of 2001, Petitioner spoke separately with a

representative of the United Teachers of Dade (UTD) and with a

School Board staff member concerning his employment situation.

9. The UTD representative advised Petitioner that

P etitioner "was on an approved leave of absence."

10. The School Board staff member told Petitioner that he

"should be on an approved leave of absence"; however, she was

unable to "find that authorization in the computer." She

suggested that Petitioner go to School Board headquarters and

inquire about the matter.

11. Petitioner went to School Board headquarters, as the

School Board staff member had suggested. The persons to whom he

spoke "couldn't locate the [leave] authorization either." They

suggested that Petitioner contact the principal of South Dade.

12. Taking this advice, Petitioner wrote two letters to

the principal inquiring about his employment status. He

received no response to either letter.

13. During the summer of 2001, Petitioner cont acted the

Division to ask about his eligibility to receive retirement

benefits.

14. Lisa Skovalia, a Benefits Specialist with the

Division, responded to Respondent's inquiry by sending him the

following letter, dated August 22, 2001:

Our records indicate that you were neither

actively employed (physically working and

earning salary) as of July 1, 2001, nor on a

school board approved leave of absence

through that date. As such, you must return

to active employment, to earn one additional

year of service c redit, before you will be

vested in the Florida Retirement System and

eligible for retirement benefits.

I have enclosed a copy of the FRS Retirement

Guide for the Regular Class for your

information. Please call or write if you

have any further questions.

15. In February of 2002, Petitioner again made contact

with School Board personnel and "was told that [his] name [had

been] removed from the computer (school records)."

16. In July of 2002, Petitioner wrote United States

Senator Bob Graham "seeking [Se nator Graham's] assistance in

helping [Petitioner] get [his] retirement form Miami - Dade Public

Schools."

17. Petitioner's letter to Senator Graham was referred to

the School Board's Superintendent of Schools, who responded by

sending the following letter, dated August 29, 2002, to

Petitioner:

Your letter . . . to Senator Bob Graham was

referred to me for response. A review of

our records indicates that your earnings as

a part - time teacher ended in July 2000. As

a part - time employee, you were not eligible

for a Board - approved leave of absence. You

were notified by letter (copy attached)

dated August 22, 2001 from Ms. Lisa

Skovalia, Benefits Specialist, State of

Florida, Division of Retirement, that

because ". . . you were neither actively

employed (physic ally working and earning

salary) as of July 1, 2001, nor on a school

board approved leave of absence through that

date," you would have to return to active

employment and earn one additional year of

service credit before being vested in the

Florida Retirem ent System.

The State of Florida Division of Retirement

is solely responsible for developing rules

and procedures for implementing changes in

the retirement law. If you disagree with

their determination, you may request an

administrative hearing by sendi ng a written

request to the Bureau of Retirement

Calculations, Cedars Executive Center, 2639

North Monroe Street, Building C,

Tallahassee, Florida 32399.

18. On September 12, 2002, Petitioner sent a letter to the

Division's Bureau of Retirement Calculat ions (Bureau) "seeking

[its] assistance in helping [him] get [his] retirement from

Miami - Dade Public Schools."

19. The Bureau responded to Petitioner's letter by

providing him with the following Statement of Account, dated

September 20, 2002:

We audited your retirement account and you

have 7.10 years of service through 07/2000.

Please note that the vesting requirement for

FRS members has been changed to 6 years of

creditable service effective July 1, 2001

for those members who were actively employed

on t hat date or on a board approved leave of

absence. Former members with 6 years, but

less than 10 years of creditable service who

were not employed with a participating FRS

employer on July 1, 2001, must return to

covered employment for one year to become

e ligible for the six - year vesting provision .

Per Maria Perez at the Miami - Dade County

School Board you were not on a board

approved leave of absence on July 1, 2001,

nor were you eligible for a board approved

leave of absence due to your position as a

part time adult school instructor. Although

your school may have allowed you to take a

leave of absence, only board approved leaves

fulfill the vesting requirements required by

law.

20. On November 15, 2002, Petitioner sent the Bureau a

letter expressing th e view that it was not "fair that, after all

[his] efforts as a teacher, [he] should lose out [on his]

retirement" and requesting "an administrative hearing concerning

[his] efforts to get retirement benefits from Miami - Dade Public

Schools."

21. The Sta te Retirement Director responded to

Petitioner's letter by sending him the following letter, dated

December 18, 2002:

This is in response to your recent letter

concerning your vesting and eligibility for

retirement benefits.

You currently have 7.10 years of retirement

credit through July 2000, your last month of

employment in a Florida Retirement System

(FRS) covered position.

[Section] 121.021(45)(b)1, F.S., states that

"Any member employed in a regularly

established position on July 1, 2001, who

complet es or has completed a total of 6

years of creditable service shall be

considered vested. . ."

An FRS employer (Dade School Board) last

employed you in a regularly established

position in July 2000 and you were not

granted a leave of absence to continue th e

employment relationship. Dade School Board

has informed us that as a part - time teacher,

you were not eligible for an approved leave

of absence. Therefore, you do not meet the

statutory requirement for coverage under the

six year vesting provision.

[Se ction] 121.021(45)(b)2, F.S., provides

the vesting requirement for members who were

not employed on July 1, 2001, as follows:

"Any member not employed in a regularly

established position on July 1, 2001, shall

be deemed vested upon completion of 6 years

o f creditable service, provided that such

member is employed in a covered position for

at least 1 work year after July 1, 2001

(emphasis supplied).

It is certainly unfortunate that you had to

leave your employment because of your

illness, but the current r etirement law

requires that you must return to covered

employment and earn one year of service

credit to be vested and eligible for

retirement benefits.

This letter constitutes final agency action.

If you do not agree with this decision and

wish to appea l this action, you must file a

formal petition for review in accordance

with the enclosed Rule 28 - 106.201, Florida

Administrative Code (F.A.C.) within 21 days

of receipt of this letter. Your petition

should be filed with the Division of

Retirement at the above address. Upon

receipt of the petition, you will be

notified by the Division or the

Administrative Law Judge of all future

proceedings and hearings. If you do not

file an appeal within the 21 - day period, you

will waive your right to request a hearin g

or mediation in this matter in accordance

with Rule 28 - 106.111, F.A.C.

22. By letter dated January 2, 2003, Petitioner

"appeal[ed]" the "final agency action" announced in the State

Retirement Director's December 18, 2002, letter.

CONCLUSIONS OF LAW

23. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties thereto pursuant to Sections

120.569 and 120.57, Florida Statutes.

24. Chapter 121, Florida Statutes, contains the Florida

Retirement System Act (Act). Section 121.011( 1), Florida

Statutes.

25. Section 121.1905, Florida Statutes, "create[s] the

Division of Retirement within the Department of Management

Services," and it further provides that "the mission of the

Division of Retirement is to provide quality and cost - effec tive

retirement services as measured by member satisfaction and by

comparison with administrative costs of comparable retirement

systems."

26. The issue that the Division must resolve in the

instant case is whether Petitioner is "vested," and therefore

el igible to receive retirement benefits, under the Act.

27. "Vested," as that term is used in the Act, is defined

in Subsection (45) of Section 121.021, Florida Statutes.

28. Since July 1, 2001, when it was amended by Section 4

of Chapter 2000 - 169, Laws o f Florida, Subsection (45) of Section

121.021, Florida Statutes, has read as follows:

(a) "Vested" or "vesting" means the

guarantee that a member is eligible to

receive a future retirement benefit upon

completion of the required years of

creditable servi ce for the employee's class

of membership, even though the member may

have terminated covered employment before

reaching normal or early retirement date.

Being vested does not entitle a member to a

disability benefit. Provisions governing

entitlement to disability benefits are set

forth under s. 121.091(4).

(b) Effective July 1, 2001, a 6 - year

vesting requirement shall be implemented for

the defined benefit program of the Florida

Retirement System. Pursuant thereto:

1. Any member employed in a regula rly

established position on July 1, 2001, who

completes or has completed a total of 6

years of creditable service shall be

considered vested as described in paragraph

(a).

2. Any member not employed in a regularly

established position on July 1, 2001, sh all

be deemed vested upon completion of 6 years

of creditable service, provided that such

member is employed in a covered position for

at least 1 work year after July 1, 2001.

However, no member shall be required to

complete more years of creditable servi ce

than would have been required for that

member to vest under retirement laws in

effect before July 1, 2001.[1/]

29. A "regularly established position," as that term is

used in the Act, is defined in Subsection (52)(b) of Section

121.0121, Florida Statu tes, as follows:

In a local agency (district school board,

county agency, community college, city, or

special district), the term means a

regularly established position which will be

in existence for a period beyond 6

consecutive months, except as provided by

rule.

30. Pursuant to Subsection (11) of Section 121.021,

Florida Statutes, one is considered an "employee," and therefore

"employed," under the Act, if he or she is "receiving salary

payments for work performed in a regularly established

position."

31. Subsection (39)(a) of Section 121.021, Florida

Statutes, however, clarifies that, under the Act, "[a] leave of

absence . . . constitute[s] a continuation of the employment

relationship, except that a leave of absence without pay due to

disability m ay constitute termination for a member, if such

member makes application for and is approved for disability

retirement in accordance with s. 121.091(4)."

32. Rule 60S - 2.006, Florida Administrative Code, addresses

the subject of "[c]redit for [l[eaves of [ a]bsence [u]nder the

Florida Retirement System." Subsection (1) of the rule provides

as follows:

A member may receive retirement credit for a

total of two work years of creditable

service for authorized leaves of absence

under the Florida Retirement Syst em, subject

to the following:

(a) A leave of absence must be authorized

in writing by a member's employer prior to

or during the leave of absence.

(b) The member must complete a minimum of

10 years of creditable service, excluding

any periods of leave of absence, except for

military leaves of absence as provided in

60S - 2.005(1), prior to receiving retirement

credit for leaves of absence.

(c) The member must return to active

employment performing service with a Florida

Retirement System employer in a r egularly

established position immediately upon

termination of the leave of absence and

remain on the employer's payroll for one

calendar month. The exceptions to this

requirement are:

1. A member placed on a leave of absence

for medical reasons who reti res on

disability while on the leave of absence

shall not be required to return to

employment in order to be eligible to

receive credit for the leave of absence; and

2. A member whose work year is less than 12

months and whose leave of absence terminates

between school years shall be eligible to

receive credit for the leave of absence as

long as he or she returns to covered

employment at the beginning of the next

school year and remains on the employer's

payroll for one calendar month.

(d) The leave of absence must occur after

the employee becomes a member of the Florida

Retirement System.

(e) The required contributions must be made

in accordance with Section 60S - 3.007.

(f) Such leave of absence shall include an

unpaid leave as provided under the fed eral

Family and Medical Leave Act of 1993 granted

for up to 12 weeks to care for children at

birth or adoption, or to care for a

seriously ill child, spouse, or parent, or

for the member's own serious illness.

33. It is undisputed that, as of July 1, 200 1, Petitioner

had completed in excess of a total of 6 years of creditable

service as a School Board employee in a covered position.

34. What the parties disagree about is whether Petitioner

was "employed in a regularly established position on July 1,

2001 ."

35. Petitioner claims that he was so "employed" on July 1,

2001, and that he therefore met the "6 - year vesting requirement"

as of that date.

36. The Division, however, has preliminarily determined

otherwise.

37. When the Division makes a preliminar y determination

that a member is not eligible to receive retirement benefits

under the Act, as it has done in the instant case, it must

advise the member of its proposed action and of the member's

opportunity to request an administrative hearing pursuant t o

Chapter 120, Florida Statutes, at which the member will be able

to make a presentation in an attempt to change the Division's

mind. See Florida League of Cities v. Administration

Commission , 586 So. 2d 397, 413 (Fla. 1st DCA 1991)("Until

proceedings are had satisfying [S]ection 120.57, or an

opportunity for them is clearly offered and waived, there can be

no agency action affecting the substantial interests of a

person."); Capeletti Brothers, Inc. v. Department of General

Services , 432 So. 2d 1359, 1363 (Fla. 1st DCA 1983)("Capeletti

misconceives the purpose of the [Section] 120.57 hearing. The

rejection of bids never became final agency action. As we have

previously held, APA hearing requirements are designed to give

affected parties an opportunity to change the agency's mind.");

Capeletti Brothers, Inc. v. Department of Transportation , 362

So. 2d 346, 348 (Fla. 1st DCA 1978)("[A]n agency must grant

affected parties a clear point of entry, within a specified time

after some recognizable event in investi gatory or other free -

form proceedings, to formal or informal proceedings under

Section 120.57."); and Couch Construction Company, Inc. v.

Department of Transportation , 361 So. 2d 172, 176 (Fla. 1st DCA

1978)("APA hearing requirements are designed to give a ffected

parties an opportunity to change the agency's mind.").

38. Where "there is a disputed issue of material fact

which formed the basis for the proposed final action," the

member is entitled to an evidentiary hearing held in accordance

with Section 120.569, Florida Statutes, and Subsection (1) of

120.57, Florida Statutes. Florida Sugar Cane League v. South

Florida Water Management District , 617 So. 2d 1065, 1066 (Fla.

4th DCA 1993).

39. At the hearing, the member bears the burden of

establishing, by a preponderance of the evidence, his or her

entitlement to retirement benefits. See Department of Banking

and Finance, Division of Securities and Investor Protection v.

Osborne Stern and Company , 670 So. 2d 932, 934 (Fla. 1996);

Espinoza v. Department of Business and Professional Regulation ,

739 So. 2d 1250, 1251 (Fla. 3d DCA 1999); Pershing Industries

Inc., v. Department of Banking and Finance , 591 So. 2d 991, 994

(Fla. 1st DCA 1991); and Section 120.57(1)(j), Florida Statutes

("Findings of fact shall be based upon a preponderance of the

evidence, except in penal or licensure disciplinary proceedings

or except as otherwise provided by statute. . . ."). The

member, however, need address only those entitlement issues

raised in the Department's notice of denial. See Woodholly

Associates v. Department of Natural Resources , 451 So. 2d 1002,

1004 (Fla. 1st DCA 1984).

40. In the instant case, after receiving notice sufficient

to afford him a "clear point of entry" to pursue an

administrative hearing on the D ivision's preliminary

determination that he did not meet the "6 - year vesting

requirement" and therefore was not eligible to receive

retirement benefits, Petitioner requested such an administrative

hearing.

41. The Division referred the matter to DOAH an d the

requested hearing was held.

42. Petitioner failed to meet his burden of proof at the

hearing.

43. In attempting to establish that he met the "6 - year

vesting requirement," as it is described in Subsection (45)(b)1

of Section 112.021, Florida Statu tes, Petitioner relied on his

own testimony regarding his employment status on July 1, 2001.

He testified that, although he has not been at work, nor

received salary payments from the School Board, since July of

2000, when he was hospitalized, he was on a n unpaid leave of

absence, and therefore "employed" by the School Board, on

July 1, 2001. The undersigned has no doubt that Petitioner

sincerely believes that he was on leave, and still maintained an

employment relationship with the School Board, as of J uly 1,

2001, as he testified; however, considering that Petitioner

never worked on a full - time basis for the School Board and

therefore at no time achieved tenured status giving him a

property interest in continuing employment with the School

Board, 2/ a nd further considering that Petitioner failed to

produce any documentation supporting his claim that he continued

his employment relationship with the School Board following his

July 2, 2000, hospitalization through and beyond July 1, 2001,

despite not bei ng physically able to report to work

(documentation, it is reasonable to expect, Petitioner would

either have in his possession or be easily able to obtain from

the School Board, if his claim were indeed true), the

undersigned finds Petitioner's evidentiar y presentation

insufficient to persuade him, as the trier of fact, that he

should rely on Petitioner's testimony and conclude that

Petitioner was still "employed" by the School Board on July 1,

2001.

44. In view of the foregoing, the Division should final ize

its preliminary determination that, contrary to Petitioner's

assertion, he is not "vested," as that term is defined in

Subsection (45)(b)1 of Section 112.021, Florida Statutes, and he

therefore is not eligible to receive retirement benefits under

the A ct.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Division issue a final order finding

that Petitioner is not "vested," as that term is defined in

Subsection (45) of Section 121.021, Florida Sta tutes.

DONE AND ENTERED this 31st day of March, 2003, in

Tallahassee, Leon County, Florida.

___________________________________

STUART M. LERNER

Administrative Law Judge

Division o f 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 31st day of March, 2003.

ENDNOTES

1/ For Petitioner, this is ten years.

2/ See Section 1012.01(4)(formerly Section 228.041(20)),

Florida Statutes ("Year of service -- The minimum time which may

be recognized in administering the state program of education .

. . as a year of service by a scho ol employee shall be full - time

actual service . . . ."); and Switzer v. McFatter , No. 82 - 1353,

1983 WL 210084 (Fla. DOAH 1983)(Recommended Order) ("Since Florida

law requires that service by instructional personnel be 'full -

time' in order to be counted as a year of service, 'part - time'

service cannot be utilized in order to fulfill the continuing

contract requirements of Section 231.36(3)(a), Florida

Statutes.")

COPIES FURNISHED:

Thomas E. Wright, Esquire

Department of Management Services

4050 Esplanade W ay, Suite 260

Tallahassee, Florida 32399 - 0950

Richard S. Mitchell

7931 Northwest 169th Terrace

Miami Lakes, Florida 33016

Erin Sjostrom, Director

Division of Retirement

Department of Management Services

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399 - 1560

Monesia Taylor Brown, Deputy General Counsel

Division of Retirement

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399 - 0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties h ave 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.