07-002128 W. D. Childers vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Friday, August 31, 2007.

Summary: Petitioner was convicted of two felonies specified in Chapter 838, Florida Statutes, both for purposes of pension forfeiture statute for public officials. Recommend that Petitioner`s pension under the Florida Retirement System be forfeited.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

W. D. CHILDERS, )

)

Petitioner, )

)

vs. ) Case No. 07 - 2128

)

DEPARTMENT OF MANAGEMENT, )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDE R

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

on July 17, 2007, by video teleconference, with the Petitioner

appearing in West Palm Beach, Florida, and the Respondent

appearing in Tallahassee, Florida, before Patricia M. Hart, a

duly - design ated Administrative Law Judge of the Division of

Administrative Hearings, who presided in Tallahassee, Florida.

APPEARANCES

For Petitioner: I. Jeffrey Pheterson, Esquire

Buckingham, Doolittle & Burroughs, LLP

5355 Town Center Road, Suite 900

Boca Raton, Florida 33481 - 0155

For Respondent: Geoffrey M. Christian, Esquire

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

STATEMENT OF THE ISSUE

Whether the Petitioner's rights and benefits under the

Florida Retirement System ("FRS") have been forfeited as set

forth in the Notice of Forfeiture of Retirement Benefits dated

August 26, 2004.

PRELIMINARY STATEMENT

In a Notice of Forfeiture of Retirement Benefits dated

August 26, 2004, the Department of Management Services, Division

of Retirement ("Division"), notified W.D. Childers that his

rights and benefits under the FRS wer e forfeited as a result of

his conviction of bribery and unlawful compensation for acts

committed while he was employed by the Escambia County

Commission. According to the notice, the convictions

constituted violations of Section 112.3173, Florida Statute s,

which provides for forfeiture of all rights and privileges under

the FRS upon conviction of offenses specified in

Section 112.3173(2)(e). Mr. Childers timely requested a formal

administrative hearing but also requested that the Division stay

the procee dings pending the outcome of several appeals of his

convictions. The Division transmitted the matter to the

Division of Administrative Hearings on May 11, 2007, for

assignment of an administrative law judge. Pursuant to notice,

the final hearing was held on July 17, 2007.

At the hearing, the Division offered its evidence first,

and it presented the testimony of Andy Snuggs ; Respondent's

Exhibits 2, 3, 5, and 6 were offered and received into evidence.

Mr. Childers presented the testimony of his wife, Ruth Childers,

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

into evidence. The parties stipulated to the matters included

in the Division's Request for Admissions numbered 1 through 10

and to the facts set forth in the Division's Unilateral Response

to Pre - Hearing Order numbered 1 through 7 and 9 through 13.

These stipulated facts have been incorporated in the Findings of

Fact herein, to the extent that they are relevant to resolution

of the issue presented.

The one - volume transcript of the proceedings was filed with

the Division on July 27, 2007, and 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 FACT

Based on the oral and docum entary evidence presented at the

final hearing, on the stipulation of the parties, and on the

entire record of this proceeding, the following findings of fact

are made:

1. The Division is the state agency charged with the

responsibility of managing, gover ning, and administering the FRS

on behalf of the Department of Management Services.

2 . The FRS is a public retirement system as defined by

Florida law. It provides benefits to local and state employees,

including teachers, state legislators, and local pu blic

officials.

3 . Mr. Childers was employed as a school teacher in

Escambia County from 1955 to 1957 , and this employment continued

for approximately two and one - half years. During this time,

Mr. Childers was a member of the Teacher Retirement System ,

w hich later became part of the FRS. His two and one - half years

of service as a teacher is credited service under the FRS.

4 . In November 1970, Mr. Childers was elected to serve as

a member of the Florida Legislature, and he continued to serve

as a state l egislator until November 2000, when he left office

as a result of term limits. As a state legislator, Mr. Childers

was a member of the FRS class of State Elected Officials, and

his 30 years of service is credited service under the FRS.

5 . In November 200 0, Mr. Childers was elected to serve as

a member of the Escambia County Board of County Commissioners.

In this position, Mr. Childers was a member of the FRS class of

County Elected Officials, and his years of service as a County

Commissioner is credited service under the FRS.

6 . On or about June 17, 2002, Mr. Childers was charged by

indictment with one count of money laundering, a second - degree

felony pursuant to Section 896.101(3)(a)1. and 2.a. and (5)(b),

Florida Statutes (2002) 1 ; one count of bribery, a third degree

felony pursuant to Section 838.015, Florida Statutes 2 ; and

one count of receipt of unlawful compensation or reward for

official behavior, a third degree felony pursuant to

Section 838.016(1), Florida Statutes. 3

7 . The charges in the June 1 7, 2002, indictment were based

solely on activities allegedly occurring subsequent to

November 2000 and arising out of Mr. Childers's service as a

member of the Escambia County Board of Commissioners.

8 . Mr. Childers was tried and found guilty by a jury o f

two counts in the indictment, bribery and unlawful compensation

or reward for official behavior. 4

9 . On or about May 16, 2003, Mr. Childers was adjudicated

guilty of these two crimes and was sentenced to 42 months in

priso n, to be followed by 18 months probation.

10 . Mr. Childers has not, to date, applied for retirement

benefits under the FRS.

11 . Mr. Childers was a public officer who was adjudicated

guilty of two offenses specified in Chapter 838, Florida

Statutes, which arose out of his service as a member of the

Escambia County Board of Commissioners. None of the actions

related to his service as a state legislator or as a teacher in

Escambia County.

CONCLUSIONS OF LAW

12 . The Division of Administrative Hearings has

jurisdiction over the subject m atter of this proceeding and of

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

Florida Statutes (2007).

13 . Article II, Section 8(d), Florida Constitution (1976),

provides in pertinent part:

SECTION 8: Ethics in government. -- A public

of fice is a public trust. The people shall

have the right to secure and sustain that

trust against abuse. To assure this right:

* * *

(d) Any public officer or employee who is

convicted of a felony involving a breach of

public trust shall be subject to forfeiture

of rights and privileges under a public

retirement system or pension plan in such

manner as may be provided by law.

14 . Section 112.3173 , Florida Statutes, provides in

pertinent part:

(1) INTENT. -- It is the intent of the

Legislature to implem ent the provisions of

s. 8(d), Art. II of the State Constitution.

(2) DEFINITIONS. -- As used in this section,

unless the context otherwise requires, the

term:

(a) "Conviction" and "convicted" mean an

adjudication of guilt by a court of

competent jurisdi ction; a plea of guilty or

of nolo contendere; a jury verdict of guilty

when adjudication of guilt is withheld and

the accused is placed on probation; or a

conviction by the Senate of an impeachable

offense.

(b) "Court" means any state or federal

court o f competent jurisdiction which is

exercising its jurisdiction to consider a

proceeding involving the alleged commission

of a specified offense.

(c) "Public officer or employee" means an

officer or employee of any public body,

political subdivision, or pu blic

instrumentality within the state.

(d) "Public retirement system" means any

retirement system or plan to which the

provisions of part VII of this chapter

apply.

(e) "Specified offense" means:

1. The committing, aiding, or abetting of

an embezzlem ent of public funds;

2. The committing, aiding, or abetting of

any theft by a public officer or employee

from his or her employer;

3. Bribery in connection with the

employment of a public officer or employee;

4. Any felony specified in chapter 838,

e xcept ss. 838.15 and 838.16;

5. The committing of an impeachable

offense; or

6. The committing of any felony by a public

officer or employee who, willfully and with

intent to defraud the public or the public

agency for which the public officer or

emplo yee acts or in which he or she is

employed of the right to receive the

faithful performance of his or her duty as a

public officer or employee, realizes or

obtains, or attempts to realize or obtain, a

profit, gain, or advantage for himself or

herself or fo r some other person through the

use or attempted use of the power, rights,

privileges, duties, or position of his or

her public office or employment position.

(3) FORFEITURE. -- Any public officer or

employee who is convicted of a specified

offense committ ed prior to retirement, or

whose office or employment is terminated by

reason of his or her admitted commission,

aid, or abetment of a specified offense,

shall forfeit all rights and benefits under

any public retirement system of which he or

she is a membe r, except for the return of

his or her accumulated contributions as of

the date of termination.

The Division asserts that all of Mr. Childers's rights and

benefits under the FRS must be forfeit ed pursuant to

Section 112.3173(3), Florida Statutes, because Mr. Childers was

convicted of two felonies specified in Sections 838.015 and

.016, Florida Statutes, bribery and unlawful compensation or

reward for official behavior, which are "specified offenses"

pursuant to Section 121.2173(2)(e)4., Florida Statutes.

1 5 . The Division, as the party asserting that

Mr. Childers's rights and benefits under the FRS should be

forfeited, bears the burden of proof in this proceeding. See

Florida Department of Transportation v. J.W.C. Co., Inc. , 396

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

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

proof, apart from statute, is on the party asserting the

affirmative of an issue before an administrative tribunal.'

Balino v. Department of Health & Rehabilitat ive Serv. , 348

So. 2d 349 (Fla. 1st DCA 1977.").

16 . The statutory forfeiture provision at issue herein is

not penal and does not involve disciplinary action against a

license. See Busbee v. State, Division of Retirement , 685

So. 2d 914, 918 (Fla. 1st DC A 1996)(statutory FRS pension

forfeiture provision does not impose punishment or involve

disciplinary action). T he standard of proof, therefore,

is "preponderance of the evidence." See § 120.57(1)(j), Fla.

Stat. (2007)("Findings of fact shall be based up on a

preponderance of the evidence, except in penal or licensure

disciplinary proceedings or except as otherwise provided by

statute . . . .").

17 . Mr. Childers and the Division have stipulated to most

of the facts material to resolution of the issue pres ented in

this case. The parties dispute the application of

Section 112.3173(3), Florida Statutes, to strip Mr. Childers and

his beneficiaries of all the rights and benefits under the FRS

that he accrued as a teacher and state legislator in the

32 years pr ior to his service on the Escambia County Board of

Commissioners. There is no dispute that the offenses for which

Mr. Childers was convicted were committed subsequent to his

giving up his seat in the Florida Legislature as a result of

term limits and were not in any way related to his service prior

to his membership on the Escambia County Board of Commissioners.

18 . As a forfeiture statute, Section 112.3173(3), Florida

Statutes, must be strictly construed if there is any ambiguity

in the language of the s tatute or if it rests on uncertain

authority. Judge Cope, in his dissenting opinion in Warshaw v.

City of Miami Firefighters' & Police Officers' Retust , 885

So. 2d 892, 896 (Fla. 3rd DCA 2004)(Cope, J., dissenting.) ,

stated:

Writing about the statute now before us

[Section 112.3173(2)(e)6. and (3), Florida

Statutes], the pension forfeiture statute,

the First District said: " No citation of

authority is required to support the rule

that forfeitures are not favored in law.

They are considered harsh exac tions, odious,

and to be avoided when possible. Statutes

imposing forfeiture will be strictly

construed in a manner such as to avoid the

forfeiture and will be liberally construed

so as to avoid and relieve from forfeiture. "

Williams v. Christian , 335 So . 2d 358, 361

(Fla. 1st DCA 1976)(footnote omitted;

emphasis added); see Mulligan v. City of

Hollywood , 871 So. 2d 249, 252 - 53 (Fla. 4th

DCA 2003)(citing Williams v. Christian ).

Thus, "the determinative analysis of the

question before us begins, proceeds and ends

with the particular terms of the authorizing

statute which, because the law is said to

abhor forfeitures, must be strictly

construed." Flam v. City of Miami Beach ,

449 So. 2d 367, 368 (Fla. 3d DCA

1984)(citations omitted).")

See also Mulligan v. City of Hollywood , 871 So. 2d 249, 252 - 253

(Fla. 4th DCA 2003)("[F]orfeitures are harsh remedies, not

favored by the legal system, and thus forfeiture statutes are

strictly construed. . . . Strict construction in this context

suggests that in doubtful cas es the courts will construe

ambiguous statutes, or even clear forfeiture provisions resting

on uncertain authority, against any loss and in favor of an

owner's retention of property. . . . Under this strict

construction, in the absence of clear meaning and manifest

authority, we should construe the ordinance in question in a

manner consistent with the interest of the owner and against the

City.")(Citations omitted).

19 . Upon careful analysis, it appears that there is no

ambiguity in the language of Section 112.3173(3) , Florida

Statutes, and it is not, therefore, subject to statutory

construction. Rather, the statute clearly provides that all

rights and benefits under the FRS are forfeited if a public

official is convicted of any specified offense, one of w hich is

conviction of a felony specified under Chapter 838, Florida

Statutes.

20 . Mr. Childers argues that the application of the

forfeiture provision in Section 212.3173(3), Florida Statutes,

should be limited to the rights and benefits he accrued under

the FRS subsequent to his leaving the state legislature in

November 2000. He contends that the offenses of which he was

convicted arose out of and related exclusively to his service on

the Escambia County Commission, so there is no nexus between

these off enses and his 32 years of service as a teacher in the

state legislature. There is, however, no requirement of a nexus

between the Mr. Childers's offenses and his employment under the

circumstances of this case.

21 . The Division specified in its Notice of Forfeiture of

Retirement Benefits that Mr. Childers' conviction of two

felonies specified in Chapter 838, specified offenses pursuant

to Section 112.3173(2)(e)4., Florida Statutes , was the basis for

its decision that forfeiture of his retirement benefits was

required . Section 112.3173(2)(e)4., Florida Statutes, does not

require that the felonies arise out of the public official's

employment for them to be specified offenses, al though it is

inherent in the offenses themselves that the prohibited conduct

ar ise in the context of the exercise of a public official's

discretion in carrying out his public duties. See §§ 838.015

and 838.016, Fla. Stat. Had the L egislature intended that the

felonies arise out of the public official's employment for

purposes of fo rfeiture, it could have included this language in

Section 112.3173(2)(e)4., Florida Statutes, as it did in

Section 112.3173(2)(e)3., Florida Statutes, which identifies as

a specified offense "[b] ribery in connection with the employment

of a public officer or employee ," and as it did in

Section 112.3173(2)(e)6., Florida Statutes, which identifies as

a specified offense "t he committing of any felony by a public

officer or employee who, willfully and with intent to defraud

the public or the public agency for w hich the public officer or

employee acts or in which he or she is employed of the right to

receive the faithful performance of his or her duty as a public

officer or employee, realizes or obtains, or attempts to realize

or obtain, a profit, gain, or advant age for himself or herself

or for some other person through the use or attempted use of the

power, rights, privileges, duties, or position of his or her

public office or employment position .") 5

22 . Mr. Childers also argues that his entitlement to the

righ ts and benefits under the FRS he accrued as a teacher and

state legislator vested when he left the legislature without

having committed any specified offenses that would subject him

to forfeiture and that his eligibility to receive the benefits

he accrued during those employments was fixed at the time he

ended his service as a state legislator and cannot be altered as

a result of events occurring after that service ended. In

support of this contention, Mr. Childers relies on language

contained in Florida S heriff's Association v. Department of

Administration, Division of Retirement , 408 So. 2d 1033 (Fla.

1981), and in State, ex rel. Stringer v. Lee , 2 So. 2d 127 (Fla.

1941).

23 . The issue before the Florida Supreme Court in Florida

Sheriff's Association was whether the Legislature could reduce

prospectively the percentage of special risk credit that special

risk law enforcement officers could earn toward retirement. In

resolving this issue, the court considered the effect of

Section 121.011(3)(d), Florida S tatutes, on the Legislature's

authority to enact amendments that alter members' rights and

benefits under the FRS. 6 The court held that the effect of

Section 121.011(3)(d), Florida Statutes, was to "vest[] all

rights and benefits already earned under the present retirement

plan so that the legislature may now only alter retirement

benefits prospectively ." Fla. Sheriff's Ass'n , 408 So. 2d at

1037 (emphasis in original). The court in Florida Sheriff's

Association described its ruling in Stringer as follows : "T he

Court has . . . expressly held that, whether in a voluntary or

mandatory plan, once a participating member reaches retirement

status, the benefits under the terms of the act in effect at the

time of the employee's retirement vest. The contractual

relationship may not thereafter be affected or adversely altered

by subsequent statutory enactments. " Id. at 1036.

24 . Neither of these cases is relevant to the application

of Section 112.3173(3), Florida Statutes, to require forfeiture

of all the rights and benefits Mr. Childers earned under the FRS

during his employment as a teacher and his service as a state

legislator and as a county commissioner. The court in Florida

Sheriff's Association concluded that the L egislature could alter

the rights and ben efits available under the FRS to active

employees, as long as the alteration was prospective only. The

court in Stringer concluded that the L egislature could not alter

the rights and benefits available under a public retirement

system after a member had r etired. These rulings are entirely

consistent with the limitation in Section 112.3173(3), Florida

Statutes, that forfeiture applies only when specified offenses

have been "committed prior to retirement." Neither case

supports Mr. Childers' contention tha t the rights and benefits

he accrued prior to leaving the Legislature in November 2000

were vested and cannot be subject to forfeiture as a result of

offenses he committed subsequent to that date when he was

serving as a county elected official. Such woul d be the case

only if he had committed the offenses after his retirement under

the FRS.

25 . Finally, Mr. Childers ' contentions that the Division

should require him to forfeit only a portion of the rights and

benefits he accrued under the FRS and that the Division should

apply a balancing test to determine the portion of his rights

and benefits under the FRS that should be subject to forfeiture,

weighing the harm to him and his family that would be caused by

the forfeiture against the harm to the public occ asioned by his

offenses , are rejected. Firstly, as noted by Mr. Childers, the

use of a balancing test applied in New Jersey to determine the

portion of public retirement benefits that should be subject

forfeiture is required by a statutory enactment effec tive in

1996, and, secondly, the court in the two 1982 New Jersey cases

cited by Mr. Childers applied a balancing test because the

public pension forfeiture legislation in New Jersey did not

clearly and unambiguously provide for forfeiture in all

instances or for forfeiture of the total benefits accrued under

the pension plan. This is not the case in Florida:

Section 112.3173(3), Florida Statutes, unequivocally requires

the forfeiture of all rights and benefits under the FRS when a

public officer is convi cted of the specified offenses identified

in Section 112.3173(2)(e), Florida Statutes.

26 . Based on the findings of fact herein and the legal

standards stated above, the Division has met its burden of

proving by a preponderance of the evidence that Mr. Ch ilders'

rights and benefits under the FRS are subject to forfeiture

pursuant to Section 112.3173(3), Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Management

Servi ces, Division of Retirement, enter a final order finding

that W.D. Childers committed specified offenses, as defined in

Section 112.3173(2)(e), Florida Statutes, prior to his

retirement from public service and ordering that, pursuant to

Section 112.3173(3) , Florida Statutes, W.D. Childers forfeit all

his rights and benefits under the Florida Retirement System,

except for the return of any accumulated contributions.

DONE AND ENTERED this 31st day of August, 2007, in

Tallahassee, Leon County, Florida.

S

___________________________________

PATRICIA M. HART

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Fil ing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 31st day of August, 2007.

EN DNOTES

1 / All references to the Florida Statutes herein shall be to the

2002 edition unless otherwise indicated.

2 / "Br ibery" is defined in Section 838.015(1), Florida Statutes,

as follows:

corruptly to give, offer, or promise to any

public servant, or, if a public servant,

corruptly to request, solicit, accept, or

agree to accept for himself or herself or

another, any pe cuniary or other benefit with

an intent or purpose to influence the

performance of any act or omission which the

person believes to be, or the public servant

represents as being, within the official

discretion of a public servant, in violation

of a public duty, or in performance of a

public duty.

3 / Section 838.016(1), Florida Statutes, provides as follows:

It is unlawful for any person corruptly to

give, offer, or promise to any public

servant, or, if a public servant, corruptly

to request, solicit, acc ept, or agree to

accept, any pecuniary or other benefit not

authorized by law, for the past, present, or

future performance, nonperformance, or

violation of any act or omission which the

person believes to have been, or the public

servant represents as hav ing been, either

within the official discretion of the public

servant, in violation of a public duty, or

in performance of a public duty. Nothing

herein shall be construed to preclude a

public servant from accepting rewards for

services performed in appre hending any

criminal.

4 / Mr. Childers' state appeals have been exhausted, and his

federal appeals are pending.

5 / The only Florida case cited by Mr. Childers to support his

contention that a nexus is required between the crimes of which

a public offici al is convicted and his or her public duties and

position, DeSoto v. Hialeah Police Pension Fund Board of

Trustees , 870 So. 2d 844 (Fla. 3d DCA 2003), involves the

specific offense identified in Section 112.3173(2)(e)6., Florida

Statutes, not the specific offense ident ified in

Section 112.3173(2)(e)4., Florida Statutes, as in this case.

6 / Section 121.011(3)(d), Florida Statutes, provides:

The rights of members of the retirement

system established by this chapter shall not

be impaired by virtue of the co nversion of

the Florida Retirement System to an employee

noncontributory system. As of July 1, 1974,

the rights of members of the retirement

system established by this chapter are

declared to be of a contractual nature,

entered into between the member and the

state, and such rights shall be legally

enforceable as valid contract rights and

shall not be abridged in any way.

COPIES FURNISHED:

Geoffrey M. Christian, Esquire

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

I. Jeffrey Pheterson, Esquire

Buckingham, Doolittle & Burroughs, LLP

5355 Town Center Road, Suite 900

Boca Raton, Florida 33481 - 0155

Sarabeth Snuggs, Director

Division of Retirement

Department of Business and

Professional Regulation

Post Office Box 9000

Tallahassee, Florida 32315 - 9000

John Brennis, General Counsel

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399 - 0950

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.