07-005050 Frederick M. Rhines vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Tuesday, June 3, 2008.

Summary: Petitioner is not liable to repay lump-sum and monthly benefits. Respondent must pay back benefits with interest.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FREDERICK M. RHINES, )

)

Petitioner, )

)

vs. ) Case No. 07-5050

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Administrative Law Judge (ALJ) Daniel Manry conducted the

final hearing of this case on behalf of the Division of

Administrative Hearings (DOAH), on February 25, 2008, in

Tallahassee, Florida.

APPEARANCES

For Petitioner: James W. Linn, Esquire

Glenn E. Thomas, Esquire

Lewis, Longman & Walker, P.A.

2600 Centennial Place, Suite 100

Tallahassee, Florida 32308-0572

For Respondent: Robert B. Button, Esquire

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399-0950

STATEMENT OF THE ISSUES

The issues are whether Petitioner became an employee of an

FRS employer within a calendar month after completing his

participation in the Deferred Retirement Option Program (DROP)

in violation of Subsection 121.091(13)(c)5.d., Florida Statutes

(2006) 1 ; whether Respondent's interpretation of relevant statutes

is an unadopted rule; and whether Respondent's interpretation of

relevant statutes is an invalid exercise of delegated

legislative authority.

PRELIMINARY STATEMENT

Respondent proposes, by letter dated October 2, 2007, to

terminate any subsequent retirement benefits to Petitioner and

for Petitioner to reimburse the Florida Retirement System (FRS)

for retirement benefits received, including a lump-sum payment

Petitioner received at the conclusion of his participation in

DROP. Petitioner timely requested an administrative hearing.

At the hearing, Petitioner testified, presented the

telephonic testimony of one additional witness, and submitted

one exhibit for admission into evidence. Respondent called one

witness and identified one exhibit but did not submit the

exhibit. The parties submitted seven joint exhibits for

admission into evidence. The unopposed Request for Official

Recognition of Legislative History is granted.

The identity of the witnesses and exhibits, and the rulings

regarding each, are set forth in the one-volume Transcript of

the hearing filed with DOAH on March 10, 2008. The undersigned

granted Petitioner's unopposed request for an extension of time

to file proposed recommended orders (PROs). Petitioner and

Respondent timely filed their respective PROs on April 30

and 29, 2008.

FINDINGS OF FACT

1. The parties stipulated to several facts in this

proceeding. Respondent is the state agency responsible for

administering the FRS. Petitioner was employed as an equipment

operator (street sweeper) by the City of Venice, Florida (the

City), for more than 35 years until he completed his

participation in DROP on January 11, 2007. At that time

Petitioner was earning approximately $38,000.00 annually.

2. The City revoked its participation in the FRS effective

January 1, 1996, and established a new City retirement plan.

The new City retirement plan applies to all employees hired

after January 1, 1996. However, the City continued its

participation in the FRS for all employees who were members of

the FRS prior to January 1, 1996.

3. Petitioner elected to participate in DROP on March 31,

2002. At the conclusion of DROP, Petitioner received a lump-sum

payment of approximately $84,279.00 and received monthly

benefits until Respondent ceased paying benefits in accordance

with the proposed agency action.

4. Petitioner's efforts at reemployment were unsuccessful.

On January 31, 2007, the City employed Petitioner to perform the

same work he previously performed at a base salary as a "new

hire." 2 The City assured Petitioner that reemployment would not

adversely affect Petitioner's FRS retirement benefits because

the City does not consider itself an FRS employer.

5. A member of the City's human resources department

contacted a representative for Respondent to verify the City's

statutory interpretation. The conversation eventually led to

this proceeding.

6. Petitioner was not employed by an employer under the

FRS during the next calendar month after completing his

participation in DROP on January 11, 2007. Judicial decisions

discussed in the Conclusions of Law hold that the issue of

whether Petitioner is an employee of an FRS employer is a

factual finding.

7. When Petitioner began employment with the City on

January 31, 2007, Petitioner was not a member of the FRS within

the meaning of Subsection 121.021(12). He was not an employee

covered under the FRS because he was hired after January 1,

1996, when the City revoked its participation in FRS.

8. On January 31, 2007, Petitioner was not an employee

within the meaning of Subsection 121.021(11). Petitioner was

not employed in a covered group within the meaning of

Subsection 121.021(34). Petitioner did not become a member

under Chapter 121, and the City was not a "city for which

coverage under this chapter" was applied for and approved for

Petitioner.

9. On January 11, 2007, Petitioner ceased all employment

relationships with "employers under this system" within the

meaning of Subsection 121.021(39). When Petitioner resumed

employment on January 31, 2007, Petitioner did not fail to

terminate employment with an employer under the FRS system.

Petitioner's new employer was not an employer under the FRS

system and had not been such an employer after January 1, 1996.

10. After January 1, 1996, the City was not a covered

employer for any employees employed after that date, including

Petitioner. On January 31, 2007, Petitioner was not an employee

of an employer within the meaning of Subsection 121.021(10).

The City did not participate in the FRS system for the benefit

of Petitioner.

11. The employment of Petitioner by the City on

January 31, 2007, had no financial impact on the FRS, and

Petitioner did not begin to accrue new benefits with the FRS.

Respondent did not demonstrate in the record why the agency's

proposed statutory interpretation requires special agency

insight or expertise and did not articulate in the record any

underlying technical reasons for deference to agency expertise.

Nor did the agency explain in the record or its PRO why the

issue of whether Petitioner is an employee of an FRS employer is

not an issue of fact that is within the exclusive province of

the fact-finder.

12. Respondent proposes a literal interpretation of

selected statutory terms without explaining legislative intent

for the prohibition against reemployment within the next

calendar month. 3 Respondent's proposed statutory interpretation

also fails to distinguish the economic impact in situations

involving what may be fairly characterized as a dual-purpose

employer; that is one like the City which is part covered

employer and part non-covered employer.

CONCLUSIONS OF LAW

13. DOAH has jurisdiction over the parties and the subject

(2007). DOAH provided the parties with adequate notice of the

formal hearing.

14. Respondent has the burden of proof in this proceeding.

Respondent must show by a preponderance of the evidence that

Petitioner became an employee of a covered employer within the

next calendar month after Petitioner concluded his participation

in DROP and that Petitioner must repay any FRS benefits he has

received. Young v. Department of Community Affairs , 625 So. 2d

831 (Fla. 1993); Florida Department of Transportation v. J.W.C.

Co. , 396 So. 2d 778 (Fla. 1st DCA 1981); and Balino v.

Department of Health and Rehabilitative Services , 348 So. 2d 349

(Fla. 1st DCA 1977). 4

15. Regardless of which party has the burden of proof, a

preponderance of the evidence shows that on and after

January 31, 2007, Petitioner was not an employee of an FRS

employer. The determination is an issue of fact that is within

the exclusive province of the fact-finder. Johnson v.

Department of Management Services, Division of Retirement ,

962 So. 2d 1038 (Fla. 1st DCA 2007).

16. Subsection 121.091(13)(c)5.d., in relevant part,

requires a DROP participant who fails to terminate employment

defined in Subsection 121.021(39)(b) to repay any benefits

received. Subsection 121.021(39)(b) defines termination, in

relevant part, to occur when a DROP participant "ceases all

employment relationships with employers under this

system. . . ." The City ceased being an employer under the FRS

on January 1, 1996. When Petitioner resumed employment with the

City on January 31, 2007, Petitioner did not have an employment

relationship with an "employer under this system."

17. Respondent invokes the judicial doctrine of "great

deference" to Respondent's statutory interpretation. The record

evidence does not support a finding that an interpretation of

relevant statutory terms requires special agency insight or

expertise. Petitioner did not articulate any underlying

technical reasons for deference to agency expertise. Johnston,

M.D. v. Department of Professional Regulation, Board of Medical

Examiners , 456 So. 2d 939, 943-944 (Fla. 1st DCA 1984).

18. In Petitioner's unopposed Amended Petition for Formal

Administrative Hearing and in Petitioner's PRO, Petitioner

argues, oxymoronically, that Respondent's proposed statutory

interpretation is "non-rule policy" that is an "unadopted rule."

Nonrule policy is agency policy that does not satisfy the

statutory definition of a rule and is not required to be

promulgated as a rule. An unadopted rule is agency policy that

satisfies the definition of a rule but has not been promulgated

in accordance with statutory rulemaking requirements.

19. Agency policy cannot be both nonrule policy and an

unadopted rule. Regardless of the moniker, neither may exceed

delegated legislative authority without violating the separation

of powers doctrine. Chiles v. Children A, B, C, D, E, and F ,

589 So. 2d 260, 264-266 (Fla. 1991). See also Carver v.

Division of Retirement , 848 So. 2d 1203, 1206 (Fla. 1st DCA

2003)(an agency may interpret, but never alter a statute).

20. Petitioner is not required to file a duplicative

120.56 proceeding if his rule challenge is adequately addressed

in this proceeding conducted pursuant to Subsection 120.57(1)(a

120.57 proceeding). Department of General Services v. Willis ,

344 So. 2d 580, 591-592 (Fla. 1st DCA 1977). The remedies

available in a 120.56 and 120.57 proceeding are intended to

enhance the remedies available to Petitioner, not limit them.

21. Petitioner's rule challenge is moot. The doctrine of

mootness requires a live case or controversy throughout the

administrative proceeding. Montgomery v. Department of Health

and Rehabilitative Services , 468 So. 2d 1014, 1016 (Fla. 1st DCA

1985). A rule challenge is rendered moot when evidence shows

the rule no longer applies to the party initiating the rule

challenge. Id. See also A.G. v. Department of Children and

Family Services , 932 So. 2d 311, 313 (Fla. 2d DCA 2006)

(termination of parental rights case is moot when issues raised

by mother cease to exist); Merkle v. Guardianship of Robert J.

Jacoby , 912 So. 2d 595, 599-600 (Fla. 2d DCA 2005)(a stipulation

agreement reached after filing suit renders action moot). The

challenged rule no longer applies to Petitioner because

Petitioner prevailed on other grounds in this 120.57 proceeding.

22. Petitioner's rule challenge is moot on other grounds.

If this Recommended Order were to determine that the challenged

agency policy is an unadopted rule and an invalid exercise

of delegated legislative authority, the remedy available under

Subsection 120.57(1)(e) is to preclude the agency from relying

on the rule; a remedy Petitioner has obtained whether the agency

policy is nonrule policy or an unadopted rule.

23. Unlike a determination of invalidity in a 120.56

proceeding, a similar determination in this proceeding would not

be a final order and would not be infused with statutory

authority to require the agency to publish notice of the

invalidity of the rule. A determination of invalidity in this

proceeding would be limited to the parties and facts of record

and would not preclude the agency from relying on the rule in

other cases except to the extent the doctrine of stare decisis

may preclude reliance on the rule in other cases involving

similar facts and law. Gessler v. Department of Business and

Professional Regulation , 627 So. 2d 501, 504 (Fla. 4th DCA

1993).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that Respondent enter a final order reinstating

Petitioner's monthly retirement benefits, paying all past due

amounts to Petitioner, with interest, and dismissing its request

for reimbursement of past FRS benefits from Petitioner.

DONE AND ENTERED this 3rd day of June, 2008, in

Tallahassee, Leon County, Florida.

S

DANIEL MANRY

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 3rd day of June, 2008.

ENDNOTES

1/ References to subsections, sections, and chapters are to

Florida Statutes (2006), unless otherwise stated.

2/ On January 31, 2007, the City employed Petitioner in a part-

time position and provided full-time employment on February 12,

2007. The new hourly rate was $12.72 compared to a previous

hourly rate of $18.63.

3/ At the request of the undersigned at the hearing, the parties

filed 95 unnumbered pages of legislative history in this

proceeding. Respondent's PRO does not mention the legislative

history. Petitioner's PRO quotes some legislative language,

which is little more than circular with statutory terms, but

fails to cite to that part of the 95 pages of legislative

history to enable to fact-finder to go to that part of the

history for independent research.

4/ The parties dispute the burden of proof in an apparent

anomaly. Petitioner's PRO asserts that he has the burden of

proof, and Respondent's PRO asserts that it has the burden of

proof.

COPIES FURNISHED :

Robert B. Button, Esquire

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399-0950

James W. Linn, Esquire

Glenn E. Thomas, Esquire

Lewis, Longman & Walker, P.A.

2600 Centennial Place, Suite 100

Tallahassee, Florida 32308-0572

Sarabeth Snuggs, Director

Division of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32315-9000

John Brenneis, 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.