05-002429 The Children`s Trust Of Miami-Dade County vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Friday, April 28, 2006.

Summary: The employees of a special taxing district who are co-employees of a leasing company are entitled to participate in the Florida Retirement System.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE CHILDREN’S TRUST OF MIAMI - )

DADE COUNTY, )

)

Petitioner, )

)

vs. ) Case No. 05 - 2429

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came for formal hearing on January 17, 2006, in

Tallahassee, Florida , before Administrative Law Judge Claude B.

Arrington of the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Maria Arista - Volsky, Esquire

Miami - Dade County Attorney’s Office

111 Northwest 1 st Street, 27 th Floor

Miami, Florida 33128

For Respondent: Robert B. Button, Esquire

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE S

Whether Petitioner was eligible for membership in the

Florida Retirement System (FRS) during the effective dates of

the Client Service Agreement ( Agreement) between Petitioner and

ADP TotalSource Services, Inc. (TotalSource). 1

Whether Res pondent is estopped to deny Petitioner’s request

to purchase retirement credit for the subject employees during

the seven - month period during which the Agreement was in effect.

PRELIMINARY STATEME NT

The Children’s Trust (TCT) is a duly - created independent

special district in Miami - Dade County, Florida . Between

October 1, 2003, and May 1, 2004, the Agreement was in effect

between Petitioner and TotalSource. Respondent ’s Division of

Retirement (DO R) determined, based on the terms of the

Agreement, that during the effective period of the Agreement,

the employees who provided services to TCT were, at a minimum,

co - employees of Petitioner and TotalSource. Because TotalSource

is not an entity that is entitled to membership in FRS,

Respondent ruled the subject employees to be ineligible for

membership in FRS. Based on that determination, TCT terminated

the Agreement with TotalSource and entered into a similar, but

more narrowly drafted, agreement with another company

(Alpha Staff ) 2 to provide human resources services to TCT .

Following the termination of the Agreement, Respondent

determined that TCT ’s employees were entitled to membership in

FRS. TCT thereafter requested that it be permitted to purchase

retirement credit for its workforce for the time the workforce

provided services to TCT during the effective period of the

Agreement. Respondent denied that request, which TCT timely

challenged. The matter was forwarded to DOAH where it was

assigned DOA H Case No. 05 - 2429, and this proceeding followed.

At the hearing, Modesto Abety, p resident and Chief

Executive Officer of TCT , testified on behalf of TCT. Cathy

Smith, Bureau Chief of Respondent’s Bureau of Enrollment and

Contrib utions, testified on beh alf of the Respondent. T he

parties jointly introduced 17 E xhibits, which included the

deposition of Miguel Maseda, General Manager for TotalSource and

the Agreement (Joint Exhibit 6). The e xhibits offered at the

hearing were accepted into evidence. Prio r to the hearing , the

parties stipulated to 23 Findings of F act, which are recited

below in slightly edited form in paragraphs 1 - 23 .

A Transcript of the hearing was filed January 27, 2006.

Both parties filed Proposed Recommended Orders, which have been

duly - considered by the undersigned in the preparation of this

Recommended Order.

FINDINGS OF FACT

1. TCT is an independent special taxing district of local

gove rnment established pursuant to Section 1.01(A)(11) of the

Miami - Dade County Home Rule Charter ; Ordinance No. 02 - 247,

Sections 1 - 11 (adopted December 3, 2002); and Section 125.901,

Florida Statutes, et. seq ., for the provision of children’s

services. TCT is devoted to funding “improvements for the

children of Miami - Dade County in the areas of healt h, safety,

parental responsibility, community responsibility and other

necessary and important services.” Miami - Dade County Code Art.

CIII, §§ 2 - 1521 - 2 - 1531.

2. Other special taxing districts for services in the

State of Florida participate in the FRS.

3. On July 23, 2003, officials from TCT contacted DOR to

communicate TCT ’s desire to participate in FRS and request

instructions on how to enroll its employees for FRS retirement

benefits.

4. On July 24, 2003, Ms. Smith , acting in her capacity as

a bene fits administrator employed by Respondent, forwarded to

TCT an FRS membership package which included a Resolution

relating to FRS membership to be approved by T CT ’s Board and two

accompanying FRS Agreements.

5. On July 30, 2003, Resolution #2003 - 01, Reso lution

Relating to Membership into the FRS, was adopted by TCT’s Board.

6. On September 1, 2003, after receiving TCT ’s Notice of

Employer Identification Number from the Internal Revenue Service

on August 27, 2003, Mr. Abety, in his capacity as the p reside nt

and CEO of TCT, signed the two FRS Agreements.

7. On September 9, 2003, Mr. Abety sent a letter to

Ms. Smith enclosing the two FRS Agreements, TCT’s Resolution

Relating to Membership into the FRS, and the IRS Notice of

Employer Identification Number, fully expecting that FRS

coverage would be initiated on October 1, 2003.

8. Mr. Abety again corresponded with Ms. Smith on

September 17, 2003 , to advise that TCT would make its retirement

contributions to FRS by check and asked if FRS preferred bi -

weekly or monthly payments.

9. On September 5, TCT entered into the Agreement with

TotalSource to provide TCT with payroll, health insurance, life

insurance, short and long - term disability insurance , and dental

and vision coverage.

10. TotalSource did not pro vide TCT employees with any

retirement benefits.

11. After reviewing TCT’s A greement with TotalSource, FRS

advised TCT on September 23, 2003 , that because it appeared the

employees covered under the A greement would be under the control

and direction of To talSource, they were employees of a private

company and thus ineligible for FRS benefits.

12. Following Respondent’s denial of participation in FRS,

TCT began the process of entering into a new agreement for the

provision of personnel services with a vend or other than

TotalSource. On February 18, 2004, TCT emailed DOR a new

proposed agreement between TCT and Alpha Staff for the provision

of payroll, insurance and other human resources services in

order to determine if the agreement would permit FRS benefit s to

begin for TCT employees .

13. On April 20, 2004, FRS determined that the agreement

between TCT and AlphaStaff would not bar the workforce of TCT

from participat ing in FRS because AlphaStaff provided only

“routine personnel services” to TCT . 3 After a pproving the

agreement between TCT and AlphaStaff , DOR accepted TCT as an FRS

member effective May 1, 2004.

14. On April 22, 2004, TCT transmitted to DOR the County

Ordinance creating TCT, two FRS Agreements, a Resolution

Relating to Membership in FRS, TC T’s federal employer tax

identification number, and a notification that a fully executed

agreeme nt between TCT and AlphaStaff would be forwarded on

April 26, 2004. The two FRS Agreements, the Resolution, and the

employer tax identification number were ide ntical to those sent

to FRS in September 2003. The agreement between TCT and

AlphaStaff that had been approved by FRS was fully executed on

April 26, 2004.

15. On April 29, 2004, DOR signed and approved the FRS

Agreement to commence FRS benefits effectiv e May 1, 2004.

16. Per letter dated May 7, 2004, DOR advised TCT that

“since your agency did not quali fy for FRS membership until

May 1, 2004, past service cannot be purchased prior to the

amendment date.”

17. Per letter dated May 27, 2004, M r. Abety re quested the

FRS effective date be changed to October 1, 2003.

18. Throughout the period TCT attempted to secure FRS

membership. TCT did not participate in any other retirement

plan. After being informed in September 2003 that it s contract

with TotalSou rce precluded participation in FRS, TCT was engaged

in the process of entering into an agreement for personnel

services that DOR would find acceptable .

19. On June 23, 2004, TCT received notice of a final

agency action from DOR in which DOR rejected TCT ’ s request to

purchase past service and advised TCT of its appeal rights.

20. TCT filed its Petition to review final agency action

requesting an evidentiary proceeding on July 15, 2004.

21. Past FRS benefits are being requested for the seven -

month period beginning October 1, 2003 and ending May 1, 2004.

22. The 18 TCT employees affected are: 4

Modesto E. Abety

Lilia R. Abril

Emily Cardenas

Dwight Da nie

Robin J. Douglas

David C. Freeman

Lisete Fuertes

K. Lori Hanson

Andrea Harris

Chareka Hawes

Christine Muriel Jeanty

Jolie C. Jerry

Jean S. Logan

Susan B. Marian

Eric R. Pinzon

Diana Ragbeer

Deborah Robinson

Margaret L. Santiago

23. The six employees who are vested in the FRS are:

Modesto E. Abe ty

Dwight Danie

Andrea Harris

Jolie C. Jerry

Diana Ragbeer

Deborah Robinson.

24. TotalSource is a licensed employee leasing company

under Part XI of Chapter 468, Florida Statutes. “Employee

leas ing” is defined by Section 468.520(4), Florida Statutes, as

being “. . . an arrangement whereby a leasing company assigns

its employees to a client and allocates the direction and

control over the leased employees between the l easing company

and the client . . . .” 5

25. TCT is referred to as the “client” in the Agreement

between TotalSource and TCT .

26. Section (1) of the Agreement, styled “The Parties

Relationship , ” provides as follows:

The parties intend to create an

arrangement so that TotalSource, a s the

Professional Employer Organization (PEO),

can provide human resource services to

Client. As provided by the Florida

legislature, TotalSource shall have

sufficient authority so as to maintain a

right of direction and control over Worksite

Employees ( defined in Section 2 ) assigned to

Client’s location, and shall retain the

authority to hire, terminate, discipline,

and reassign Worksite Employees. Client

shall, however, retain sufficient direction

and control over the Worksite Employees as

is necessary to conduct Client’s business

and without which Client would be unable to

conduct its business, discharge any

fiduciary responsibility that it may have,

or comply with an applicable licensure,

regulatory, or statutory requirement of

Client. Such authority maintained by Client

shall include the right to accept or cancel

the assignment of any Worksite Employee.

Additionally, Client shall have sole and

exclusive control over the day to day job

duties of Worksite Employees and over the

job site at which, or f rom which, Worksite

Employees perform their services. Client

expressly absolves TotalSource of liability

which results from control over the Worksite

Employee’s day - to - day job duties and the job

site at which, or from which, Worksite

Employees perform the ir services. Further,

Client retains full responsibility for its

business products and services, worksite

premises, property, and any actions by an

third party, contractor, independent

contractor or non - Worksite Employee. Client

acknowledges that TotalSo urce has the right

to retain and reassign a Worksite Employee

who has been terminated by Client.

27. Section 2 of the Agreement, styled “ TotalSource

Relationship to the Worksite Employees , ” provides as follows:

The term “ W orksite E mployees” means

indiv iduals hired by TotalSource, assigned

to Client’s worksite, after the individuals

[have] satisfactorily completed TotalSource

pre - employment paperwork [and] background

screens as necessary. Client agrees to

submit to TotalSource the completed

TotalSource pre - employment paperwork no

later than two (2) business days after the

Client selects the person for employment.

The term excludes 1) those employees hired

by TotalSource to perform services for

TotalSource and not assigned to any Client

Worksite (i.e., T otalSource Corporate

Employees), and 2) Independent contractors

or individuals who may be providing services

to Client through any other arrangement

entered into solely by Client. TotalSource

will notify all Worksite Employees in

writing about the PEO arr angement at the

beginning and end of this Agreement. During

the Agreement, both Client and TotalSource

will employ each Worksite Employee. This

Agreement does not change the underlying

employment relationship between any Worksite

Employee and Client that existed prior to or

may be created after the Effective Date.

Further, this Agreement does not create any

rights for any Worksite Employee that did

not previously exist (e.g., creating an

employment contract with the Worksite

Employee).

28. In Section 5 (F) of the Agreement, the parties

acknowledge that the Client exercises control over the primary

terms and conditions of employment for the subject e mployees.

29. Miguel Masedo was the General Manager for the

Southeastern operations for TotalSource when it entered into the

Agreement with TCT . Mr. Masedo did not negotiate the Agreement

between his company and TCT, but he did sign the Agreement, and

he testified as to the manner in which his company operate d with

TCT.

30. Mr. Masedo’s depositio n was ad mitted as Joint

Exhibit 17. On page 22, beginning at line 12, the following

Questions from Ms. Arista - Volsky and Answers from Mr. Masedo

appear :

Q. Okay. Earlier you told me and we

discussed that The Trust employees in fact

were hired by The Trust be fore they

contracted with your services, correct?

A. Yes.

Q. So basically when they entered into

this contract and were put on the payroll

for the purposes of payroll processing,

that’s when you make the determination, or

you’re saying that they bec ame . . . [sic]

A. We actually hired them into ADP

TotalSource, they signed new documentation,

I - 9s, W - 4s, they gave us their employment

information, so we literally hired them on

to ADP TotalSource. [ 6 ]

31. O n page 23, beginning at line 13 , the follo wing

Questions from Ms. Arista - Volsky and Answers from Mr. Masedo

appear :

Q. And the Client Services Agreement did

not change the underlying emplo yment

relationship between The Trust and its

employees; correct?

A. What the Client Services Agreement d id

was it defined us as another employer for

these employees, so we are under a co -

employment relationship , so certain

employment responsibilities would have be en

the responsibilities of The Trust and would

have remained, and other employment

responsibilit ies would have transferred over

to ADP TotalSource.

32. TotalSource was the named employer on each employee’s

W - 2 forms . For each subject employee, TotalSource also paid

social security taxes and provided workers’ compensation

coverage. TotalSource is sued salary warrants to each employee.

These payments were to be from funds TCT was required by the

Agreement to pay to TotalSource. TotalSource was , by the terms

of the Agreement, responsible for the payment of the subject

employees even if TCT failed t o make its required payments to

TotalSource.

33. Although by the terms of the Agreement, TotalSource

had legal authority to hire, supervise, and discipline the

subject employees, TotalSource rarely exercised those rights in

dealing with a client and it di d not do so in its dealings with

TCT. TotalSource never attempted to control or run the affairs

of TCT. It never attempted to exercise any direction or control

over Mr. Abety or any other subject employee.

34 . TCT initially recruited and hired all of the subject

employees.

35 . At no time during the period at issue did a

TotalSource corporate employee come to the TCT worksite for the

purposes of supervising or monitoring the activities of the

subject e mployees. TCT controlled the daily activities of the

subject employees at all times relevant to this proceeding.

36 . At all times relevant to this proceeding, Mr. Abety

and his staff set the terms and conditions of employment for the

subject e mployees and supervised the day - to - day operations of

TCT.

3 7. At no time relevant to this proceeding did Mr. Abety,

acting on behalf of TCT, intend for TotalSource to exercise any

control over the subject employees. Mr. Abety intended only

that TotalSource provide human resources services in the forms

of payroll services, worker’s compensation coverage, and a

benefits package (excluding a retirement plan).

38. Mr. Abety testified that he did not construe the

Agreement as being a contract to lease the subject employees

from TotalSource. Based on the findings t hat follow, it is

found that Mr. Abety knew or should have known that he was

entering into an employee leasing agreement with TotalSource.

As set forth above, i n the Agreement, TotalSource refers to

itself as a Professional Employer Organization, which is a term

for an employee leasing company. The Agreement provides that

TotalSource shall have “. . . sufficient authority so as to

maintain a right of direction and control over Worksite

Employees . . . and shall retain the authority to hire,

terminate, dis cipline, an d reassign Worksite Employees. . . .”

Moreover, i n the final paragraph of the Agreement, under the

heading of “Additional Client Representation” the following

appears:

“Client understands that, pursuant to

Florida law, it may not enter into a PEO

(sometimes referred to as an employee

leasing) agreement with TotalSource if

Client owes a current or prior PEO any money

pursuant to any service agreement which

existed between that current or prior PEO

and Client, or if Client owes a current or

pr ior insurer any premium payments . . . .

39 . DOR denied TCT’s request for past service because,

under the terms of the Agreement, and Part XI of Chap ter 468,

Florida Statutes, the subject em ployees appeared to be employees

of TotalSource . In its letter dated June 23, 2004, with the

style of “Final Agency Action”, DOR advised Mr. Abety that TCT

“. . . joined the FRS effective May 1, 2004 and is ineligible to

purchase past service since prior to that date the employees

were employed by ADP TotalSource Ser vices, Inc., a private

company.”

40. While the Agreement was in effect, the subject

employees were employees of both TCT and TotalSource for certain

purposes . Under the Agreement between TotalSource and TCT ,

TotalSource and T CT were dual or joint emplo yers. There wa s a

co - employment relationship.

41. DOR agrees that TCT and TotalSource were co - employers

or joint employers. In p aragraph 25 of its Proposed Recommended

Order, DOR submitted the proposed finding of fact that during

the effective dates of the Agreement, the subject employees were

“. . . dual or joint employers. There [was] a co - employment

arrangement.” In p aragraph 53 of its Proposed Recommended

Order, DOR proposed the following conclusion of law:

53. However, the totality of the evid ence

establishes that TotalSource and Children’s

Trust are, as Mr. Masedo testified, ‘under a

co - employment relationship.’ Children’s

Trust and TotalSource were inextricably

linked as co - employers, or joint or dual

employers. They both shared attributes of

being an ‘employer.’

42 . Prior to entering into the Agreement, staff of TCT

contacted staff of DOR to inquire what needed to be done for TCT

employees to become members of the FRS. DOR staff advised that

a membership package would be mailed and that the TCT employees

would become part of the FRS after the membership package was

processed. For service performed by TCT employees prior to the

date TCT became part of the FRS, DOR staff advised that TCT

employees could purchase credit for that prior servi ce period if

TCT did not participate in another retirement plan.

43 . TCT maintains that the information provided by DOR

staff that TCT could participate in FRS as long as TCT did not

participate in another retirement plan was misleading. TCT

further ma intains that it detrimentally relied on that

misleading information from DOR and that DOR should be estopped

to deny the right t o purchase credit for the seven - month period

at issue in this proceeding.

44 . TCT did not disclose to DOR that they were

conte mplating entering into the Agreement with TotalSource prior

to doing so. Consequently, DOR had no reason to discuss with

TCT its position that the Agreement would preclude TCT’s

membership in FRS . DOR staff gave TCT staff accurate advice

b ased on the inf ormation provided to DOR by TCT .

45 . TCT would not h ave executed the Agreement had it known

that the terms of the Agreement would disqualify it from

membership in FRS. Most of the subject employees were initially

recruited by TCT because they were experi enced government

employees. It was important to TCT from its inception that its

employees continue t o be eligible for FRS benefits .

46 . TCT made diligent efforts to locate a suitable human

resources provider to replace TotalSource after it learned from

D OR that the terms of the Agreement disqualified the subject

e mployees from membership in FRS. It t ook TCT almost the entire

seven - month period at issue in this proceeding to locate the

replacem ent provider (AlphaStaff ).

CONCLUSIONS OF LAW

47 . The Divi sion of Administrative Hearings has

jurisdiction over the subject matter parties to this case

pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

48 . In administrative proceedings, the standard of proof

is a preponderance of evidence. Agrico Ch emical Co. v.

Department of Environmental Regulation, 265 So . 2d 759 at 763

(Fla. 1st DCA 1979), rev . denied , 376 So.2d 74. The

preponderance of the evidence standard requires proof by "the

greater weight of the evidence," Black's Law Dictionary 1201

(7th ed. 1999), or evidence that "more likely than not" tends to

prove a certain proposition. See Gross v. Lyons , 763 So. 2d

276, 289 n.1 (Fla. 2000)(relying on American Tobacco Co. v.

State , 697 So. 2d 1249, 1254 (Fla. 4th DCA 1997) quoting

Bourjaily v. Unit ed States , 483 U.S. 171, 175 (1987)).

49 . The burden of going forward and the burden of

persuasion are on the party asserting the affirmative of the

issue. Balino v. Department of Health and Rehabilitative

Services , 348 So. 2d 349 (Fla. 1 st DCA 1977), D e partment of

Transportation v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA

1981). Accordingly, it is Petitioner's burden to demonstrate

its entitlement to purchase past service for the subject

employees .

50 . An agency’s interpretation of the statutes it is

required to enforce is entitled to deference unless the

interpretation contradicts the plain meaning of the statute , is

clearly erroneous , or is contrary to law. See Level 3

Communications, LLC v. Jacobs , 841 So. 2d 447 (Fla. 2003) and

Osorio v. Boa rd of Professional Surveyors and Mappers , 898 So.

2d 188, (Fla. 5th DCA 2005).

51. Section 121.021(10), Florida Statutes, defines

“ employer ”:

"Employer" means any agency, branch,

department, institution, university,

institution of higher education, or board of

the state, or any county agency, branch,

department, board, district school board, or

special district of the state, or any city

of the state which participates in the

system for the benefit of certain of its

employees, or a charter school or c harter

technical career center that participates as

provided in s. 121.051 (2)(d).

52. TotalSource is a private corporation. It i s not an

employer as that term is defined by Section 121.021(10), Florida

Statutes.

53. A special taxing district such as TCT can be an

“employer” within the meaning of Section 121.021(10), Florida

Statutes, if the special taxing district has any empl oyees. It

is axiomatic that to be an employer, an entity has to have

employees.

54 . Following his review of the proposed AlphaStaff

contract, Alberto L. Dominguez, general counsel of the

Department of Management Services, wrote to inform TCT Chief

Financ ial Officer Joile C. Jerry that the AlphaStaff contract

would be acceptable and that TCT would be eligible for

membership in FRS following its execution. That letter, dated

April 20 , 2004, and introduced as Exhibit 10, articulated DOR’s

position as to the appropriate standard to determine whether an

employer - employee relationship exists. That standard, which

provide s , in part, as follows , has been accepted by the

undersigned :

To participate in the Florida Retirement

System (FRS), an employee must work f or an

FRS public employer. ( See §§ 121.021(10),

(11), and 121.051, Fla . Stat .) The Division

accepts that the Trust is an independent

special district and is eligible to

participate in the FRS. Under the terms of

the proposed Administrative Services

Agre ement between the Trust and AlphaStaff ,

AlphaStaff provides services limited to

payroll processing, record keeping, fringe

benefits, human resources training, related

personnel services, etc. It does not

exercise direction and control of the

Children ’ s Tr ust workforce.

The general principle is that direction

and control is the crucial test in

determining an employee - employer

relationship. ( Berrier v. Associated

Indemnity Company , 196 So. 2d 188 at 192

(Fla. 1940), Patton v. Glisson , 38 So. 2d

839 at 840 (Fla. 1949), Gibney Auto Sales v.

Cutchins , 97 So. 2d 145 (Fla. 3d DCA 1957),

Crawford v. Dept. of Military Affairs , 412

So. 2d 449 (Fla. 5 th DCA 1982). Therefore,

because the Agreement does not provide that

AlphaStaff may exercise control and

direction of the Children ’ s Trust employees,

or make hiring and firing decisions – the

us ual requisites for finding and [sic]

employee - employer relationship – the

Children ’ s Trust is the employer.

55 . There is no doubt that the subject employees were, at

all time s relevant to this proceeding, providing valuable

governmental services to the public by virtue of their co -

employment with TCT and TotalSource. If these employees are

entitled to purchase past retirement credit for the seven months

that the Agreement was in effect, it must be by virtue of their

employment with TCT, not their employment with TotalSource.

56 . Section 121.021(18), Florida Statutes, defines “past

service”:

“Past service” of any member, as provided

in s. 121.081 (1), means the number of ye ars

and complete months and any fractional part

of a month, recognized and credited by an

employer and approved by the administrator,

during which the member was in the active

employ of an employer prior to his or her

date of participation.

57 . Responden t correctly argues that t here is no statutory

authority that employee leasing companies are employers under

the FRS . It also correctly argues that there is no express

statutory authority to recognize co - employers, or dual or joint

employers where one empl oyer i s a public entity and the other is

a private employing entity.

58 . Respondent correctly construed the Agreement, which

contains confusing and conflicting provisions. Respondent

correctly concluded that an employer - employee relationship

existed be tween the subject employees and TotalSource .

Respondent also correctly concluded that TotalSource is not an

agency whose employees are entitled to membership in FRS by

virtue of their employment with TotalSource. Respondent also

correctly concluded that TCT had an employer - employee

relationship with the subject employees.

59 . Respondent incorrectly concluded that said

relationship between TotalSource and the subject employees

precluded TCT from membership in FRS . Petitioner established

that during the a pplicable period it was an agency as defined by

statute, it had an employer - employee relationship with the

subject employees , and it was, consequently, entitled to

membership in FRS as of October 1, 2003. That is all the

statutory scheme requires.

60 . To establish estoppel against the state, the claimant

must prove:

(1) a representation by an agent of the

state as to a material fact that is contrary

to a later asserted position; (2) reasonable

reliance on the representation; and (3) a

change in positio n detrimental to the party

claiming estoppel caused by the

representation and reliance thereon.

Harris v. Department of Administration, Div. of State Employees'

Ins. , 577 So. 2d 1363, 1366 (Fla. 1st DCA 1991). In addition,

"rare and exceptional circumsta nces" must be shown to exist.

See Sutron Corp. v. Lake County Water Authority , 870 So. 2d

930, 933 (Fla. 5th DCA 2004). As the court in Sutron Corp.

explained:

The cases in which [estoppel] has been

applied against a government agency involve

potentiall y severe economic consequences to

the person who relied on a government

agent's misstatement of fact, or situations

in which the conduct of the government was

unbearably egregious.

61 . Petitioner did not prove that the doctrine of estoppel

should be appl ied to the facts of this proceeding.

RECOMMENDATION

Based upon the Findings of Fact and Conclusions of Law, it

is

RECOMMENDED that Respondent enter a Final Order providing

that TCT be granted membership in FRS effective October 1, 2003 ,

and that it be p ermitted to purchase retirement credit for the

subject employees for the seven - month period beginning

October 1, 2003, and ending April 30 , 2004.

DONE AND ENTERED this 28th day of April , 2006 , in

Tallahassee, Leon County, Florida.

S

CLAUDE B. ARRINGTON

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 28th day of April , 2006 .

ENDNOTES

1/ Petitioner in this proceeding is the Children’s Trust, not

the employees who will be impacted by the Final O rder that will

be entered. Petitioner has n ot asserted, on behalf of the

subject employees, any right to seek credit for the subject

period of time pursuant to the provisions of Section

121.081(1)(f), Florida Statutes. All statutory references are

to Florida Statutes (2005).

2/ This entity is al so referred to at times by the parties and

in some exhibits as AlphaStaffing.

3/ This letter was admitted as Exhibit 10 and is discussed in

more detail in a subsequent paragraph.

4/ These 18 employees will be subsequently referred to as the

subject e mployees.

5/ Section 469.520(4)(b), Florida Statutes, sets forth

exceptions to the definition that are not applicable to this

proceeding.

6/ Unfortunately, this paperwork was not introduced as an

exhibit.

COPIES FURNISHED :

Robert B. Button, Esquire

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

Maria Arista - Volsky, Esquire

Miami - Dade County Attorney’s Office

111 Northwest 1st Street, 27th Floor

Miami, Florida 33128

Sarabeth Snuggs, Director

Divisio n of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32399 - 9000

Steven Ferst, General Counsel

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

NOTICE OF RIGHT TO SU BMIT 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.