15-005416 James B. Anderson vs. Department Of Management Services, Division Of Retirement
 Status: Closed
Recommended Order on Friday, January 22, 2016.


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Summary: FRS member retired, chose Option 1, and received Option 1 benefits for 7 years. When he died, his widow requested Option 3 spousal benefits based on an executed option change form that was not sent to FRS. Recommended: deny request.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8JAMES B. ANDERSON,

11Petitioner,

12vs. Case No. 15 - 5416

18DEPARTMENT OF MANAGEMENT

21SERVICES, DIVISION OF

24RETIREMENT,

25Respondent.

26_______________________________/

27RECOMMENDED ORDER

29On December 7, 2015, a disputed fact hearing was held in

40this case by video teleconferencing, with sites in Tampa and

50Tallahassee, before J. Lawrence Johnston, Administrative Law

57Judge, Division of Administrative Hearings (DOAH).

63APPEARANCES

64For Petitioner: Nicholas E. Karatinos, Esquire

70Law Office of Karatinos

74Suite 101

7618920 North Dale Mabry Highway,

81Lutz, Fl orida 33548

85For Respondent: Joe M. Thompson, Esquire

91Department of Management Services

95Suite 160

974050 Esplanade Way

100Tallahassee, Florida 32399

103STATEMENT OF THE ISSUE

107The issue in this case is whether James B. Anderson, a

118deceased retiree in the Florida Retirement S ystem Pension Plan,

128selected Option 1 (maximum retireeÓs monthly benefit without any

137spousal benefit after death of the retiree) or Option 3 (a

148reduced retireeÓs monthly benefit with continued spousal benefit

156after death of the retiree).

161PRELIMINARY STAT EMENT

164Mr. Anderson was a retiree in the Florida Retirement System

174Pension Plan when he died in February 2015. In March 2015, his

186widow, Mitzi Anderson, contacted the Department of Management

194Services, Division of Retirement, which informed her that she wa s

205not due a spousal benefit.

210In August 2015, M r s. Anderson sent the Division of

221Retirement a certified letter requesting a spousal benefit, which

230was denied.

232In September 2015, M r s. Anderson filed a Petition for Review

244in the name of her deceased husband to challenge the intended

255denial. The Division of Retirement forwarded the petition to

264DOAH for a hearing.

268On November 13, the Respondent filed a Notice of Filing

278Motion for Attorney Fees with PetitionerÓs Counsel. On

286November 24, the Petitioner filed a response in opposition and a

297motion to strike for filing the motion without complying with the

308Ðsafe harborÑ provision in section 57.105(5), Florida Statutes

316(2015). The motion to strike was denied because the motion was

327not yet filed at DOAH, but only served on the Petitioner in

339compliance with the safe harbor provision.

345The parties filed separate pre - hearing statements instead of

355a joint pre - hearing stipulation, supposedly because they could

365not agree on a joint pre - hearing stipulation. However, a

376comparison of the two pre - hearing statements revealed that the

387disputes between the parties were narrow.

393One difference between the partiesÓ pre - hearing statements

402was the PetitionerÓs statement that the RespondentÓs motion for

411attorney f ees was pending a nd required action, compared to the

423RespondentÓs statement that only the PetitionerÓs motion to

431strike the motion for attorneyÓs fees was pending. Two days

441after the RespondentÓs pre - hearing statement, the Respondent

450filed a Notice of Filing Second Motion for Attorney Fees with

461PetitionerÓs Counsel. However, no motion was attached, and none

470has been filed by the Respondent to date.

478The DOAH hearing confirmed that the dispute between the

487parties was indeed narrow. At the outset of the hearing, the

498Petit ioner sought to admit all of the RespondentÓs Exhibits in

509evidence, but the Respondent objected and insisted that the

518Petitioner move exhibits into evidence during the PetitionerÓs

526case - in - chief. The Petitioner then made an opening statement

538that admitted virtually every fact asserted by the Respondent.

547The Petitioner called Donna Pepper and Mitzi Anderson to

556testify and moved the RespondentÓs Exhibits 1, 6, and 7 into

567evidence. The Respondent called Theresa Bach, Allison Olson,

575Todd Gunderson, and Davi d Heidel to testify. The RespondentÓs

585Exhibits 2, 3, 4, 9, 11, 12, 13, 15, 18, and 19 were admitted

599into evidence without objection. The Respondent also had

607pertinent statutes and rules, a reference manual for Florida

616notaries, and a 2006 retirement guid e officially recognized and

626admitted into evidence.

629The Transcript of the final hearing was filed on

638December 15, 2015. The parties filed proposed recommended orders

647that have been considered in preparation of this Recommended

656Order.

657FINDING S OF FACT

6611 . On June 30, 2007, the named Petitioner, James B.

672Anderson, terminated his employment with the University of South

681Florida (USF) at the age of 69 years and 9 months. At the time,

695his tenure at USF spanned 27 years and entitled him to receive

707pension ben efits under the Florida State Retirement System

716Pension Plan.

7182. Also o n June 30 , 2007, Mr. Anderson completed an

729application for retirement . By applying Mr. Anderson, who was

739USFÓs Director of Insurance and Risk Management, acknowledged

747that he would no t be able to add service, change options, change

760his type of retirement (regular, disability, and early) or elect

770the Invest ment Plan once his retirement became final, which would

781be when he cashed or deposited any benefit payment.

7903. Also o n July 2, 20 07, Mr. Anderson and his wife, Mitzi

804Anderson, executed a Statutory Official Form FRS 110 before a

814notary public. By doing so, they selected Option 1, which

824provides the maximum pension benefits to Mr. Anderson until his

834death and no pension benefits to h is wife after his death. The

847form stated clearly, in bold print, that Option 1 did not provide

859a continuing benefit after Mr. AndersonÓs death and that the

869selection of Option 1 would be final when Mr. Anderson cashed or

881deposited any benefit payment.

8854 . The next day, Mr. Anderson faxed the executed form to

897the Division of Retirement, which mailed Mr. Anderson an

906acknowledgement of receipt of the executed form. The

914acknowledgement included a clear statement, in bold print, that

923Mr. Anderson would not b e able to change his benefit option

935selection after retirement and that his retirement would become

944final when he cashed or deposited any benefit payment.

9535 . Mr. Anderson had second thoughts about his benefit

963option selection and contacted Donna Pepp er, a retirement

972specialist employed by USF, to discuss changing to Option 3,

982which would give him a reduced pension benefit that would

992continue and be paid to his wife after his death.

10026 . On July 6, 2007, Ms. Pepper sent an email to

1014Mr. Anderson statin g: ÐHere is another option selection form so

1025that you can change your option.Ñ The email attached a blank

1036Statutory Official Form FRS 110. Ms. PepperÓs email also stated:

1046ÐAs we discussed, you may want to indicate that this form should

1058supersede the pr eviously submitted form.Ñ It also ad vised the

1069Petitioner to keep a copy for his records and send the original

1081to the Division of Retirement as soon as possible.

10907 . On July 20, 2007, at 12:53 p.m., a comment was entered

1103on the Integrated Retirement Infor mation System (IRIS) telephone

1112log, documenting that Mr. Anderson was considering changing his

1121benefit option selection and would Ðeither FAX a form with a

1132change of option on it or call to let them know he would not make

1147the change.Ñ The comment also doc umented that Jan Steller in

1158retirement payroll was asked to hold Mr. AndersonÓs first check

1168until Ðthis is resolved.Ñ Later the same day, at 2:30 p.m.,

1179another comment was added to document that Mr. Anderson had

1189called back to say he had decided to stay w ith Option 1 and that

1204Jan Steller had been called back and asked Ðto release his

1215check.Ñ

12168 . On July 31, 2007, an initial pension check was sent to

1229Mr. Anderson in the amount of $4,188.45, in accordance with his

1241selection of benefit Option 1, which was abo ut $1,200 more than

1254it would be under Option 3. This check was not immediately

1265cashed.

12669 . On August 31, 2007, a second Option 1 pension check in

1279the same amount was sent to Mr. Anderson.

128710 . On September 4, 2007, Mr. Anderson deposited the first

1298two benefit checks into his Bank of America account. He

1308continued to receive and cash or deposit monthly Option 1 benefit

1319checks through January 2015.

132311 . Mr. Anderson died on February 14, 2015. His wife

1334notified the Division of Retirement, which stopped benefit

1342payments in accordance with Mr. AndersonÓs Option 1 selection.

135112 . In March 2015, Mrs. Anderson found among her husbandÓs

1362papers a copy of an executed Form FRS 110 that selected Option 3.

1375Notwithstanding the telephonic communications with the D ivision

1383of Retirement on July 20, 2007, the executed form indicates that

1394it was notarized on July 23, 2007. Included in handwriting at

1405the bottom of the executed form was the language, as suggested by

1417Ms. Pepper: ÐThis option supersedes option dated 7 - 02 - 07.Ñ

1429Mrs. Anderson also found a copy of Donna PepperÓs e - mail dated

1442July 6, 2007, with instructions on how to change the selection of

1454pension payments. Mrs. Anderson sent copies to the Division of

1464Retirement and requested Option 3 spousal benefit payme nts.

147313 . The Division of Retirement denied Mrs. AndersonÓs

1482request because it did not receive an Option 3 benefit selection

1493before the copy Mrs. Anderson sent in March 2015 . There was no

1506evidence that the form was sent to the Division of Retirement

1517befo re then . This, together with the fact that Mr. Anderson

1529received and cashed or deposited seven and a half yearsÓ worth of

1541monthly Option 1 benefit checks, which were each over $1,200 more

1553than the Option 3 benefit would have been, support a finding that

1565M r. Anderson actually selected Option 1 and never switched to

1576Option 3. It is not clear from the evidence why Mr. Anderson

1588kept a copy of an executed change from Option 1 to Option 3 after

1602deciding not to send it to the Division of Retirement.

1612CONCLUSION S OF LAW

161614. The Respondent administers the Florida Retirement

1623System under chapter 121, Florida Statutes (2015).

163015. Section 121.091(6)(a)1. and 3. set out the Option 1 and

1641Option 3 benefit options. The statutes, rules, and retirement

1650guide are clear that the benefit option must be selected before

1661retirement and is Ðfinal and irrevocable at the time a benefit

1672payment is cashed or deposited . . . .Ñ £ 121.091(6)(h), Fla.

1684Stat. (2015).

168616. In this case, the Petitioner -- nominally Mr. Anderson,

1696but ac tually his w idow -- has the burden to prove entitlement to

1710Option 3 benefits. See Wilson v. Dep't of Admin., Div. of Ret. ,

1722538 So. 2d 139, 141 - 142 (Fla. 4th DCA 1989); Fla. Dep't of

1736Transp. v. J.W.C. Co. , Inc., 396 So. 2d 778 (Fla. 1st DCA 1981);

1749Balino v. DepÓt of Health , etc., 348 So. 2d 349 (Fla. 1st DCA

17621977)(unless otherwise provided by statute, the party asserting

1770the affirmative of an issue has the burden of proof). The

1781standard of proof is a preponderance of the evidence.

1790§ 120.57(1)(j), Fla. Stat .

179517. The Petitioner did not prove that Mr. Anderson chose

1805Option 3 before retirement. To the contrary, the evidence was

1815that he chose Option 1 and received monthly benefits accordingly

1825for over seven years.

182918. The Petitioner takes the position that he chose Option

18393 because he executed a notarized change to Option 3 even if he

1852never filed it with the Division of Retirement. To maintain this

1863position, he must argue from the absence of an explicit statement

1874in the statutes, rules, and retirement guid e that an executed

1885option selection form must be sent to and received by the

1896Division of Retirement, that it is unnecessary to do so to change

1908a benefit option selection. This tortured reading of the

1917statutes, rules, and retirement guide is unreasonable a nd

1926untenable. It would mean that the Division of Retirement would

1936never know what benefit option a retiree selected because there

1946always would be the possibility of an executed and notarized

1956option change form that was not sent to or received by the

1968Divis ion of Retirement. See DepÓt of Hwy. Safety v. Patrick , 895

1980So. 2d 1131, 1135 (Fla 5th DCA 2005) (ÐCourts ought to avoid an

1993interpretation of a statute that would lead to an unreasonable,

2003absurd, or ridiculous result, provided the language of the

2012statute is susceptible of an alternative interpretation.Ñ).

201919. This case is similar to Hylton - Julius v. Depar t ment of

2033Management Services, Division of Retirement , DOAH Case 11 - 4534

2043(RO Feb. 9, 2012 ; FO May 2, 2012 ) , affÓd per curiam , 110 So. 3d

2058463 (Fla. 4t h DCA 2013). There, an employ ee retired early and

2071cashed or deposited benefit checks for almost a year, then

2081attempted to change to disability benefits. The Respondent held

2090that the choice of early retirement benefits was final and

2100irrevocable, and could not be changed to disability benefits. An

2110agencyÓs interpretations of statutes it administers and rules it

2119promulgates are given deference and will not be overturned by a

2130court unless clearly erroneous. See Republic Media, Inc. v.

2139DepÓt of Transp. , 714 So. 2d 1203, 1205 (Fla. 5th DCA 1998);

2151Atlantic Outdoor Advertising v. Fla. DepÓt of Transp. , 581 So. 2d

2162384, 386 (Fla. 1st DCA 1987); Natelson v. DepÓt of Ins. , 454 So.

21752d 31, 32 (Fla. 1st DCA 1984). Here, the RespondentÓs

2185interpretations of its statut es and rules are very reasonable.

2195RECOMMENDATION

2196Based on the foregoing Findings of Fact and Conclusions of

2206Law, it is RECOMMENDED that the Department of Management

2215Services, Division of Retirement, enter a final order finding

2224that Mr. Anderson selected benefit Option 1, finally and

2233irrevocably and that Mrs. Anderson is not entitled to Option 3

2244spousal benefits.

2246DONE AND ENTERED this 22nd day of January , 2016 , in

2256Tallahassee, Leon County, Florida.

2260S

2261J. LAWRENCE JOHNSTO N

2265Administrative Law Judge

2268Division of Administrative Hearings

2272The DeSoto Building

22751230 Apalachee Parkway

2278Tallahassee, Florida 32399 - 3060

2283(850) 488 - 9675

2287Fax Filing (850) 921 - 6847

2293www.doah.state.fl.us

2294Filed with the Clerk of the

2300Division of Administrative Hearings

2304this 22nd day of January , 2016 .

2311COPIES FURNISHED:

2313Nicholas E. Karatinos, Esquire

2317Law Office of Karatinos

2321Suite 101

232318920 North Dale Mabry Highway

2328Lutz, Florida 33540

2331(eServed)

2332Joe Thompson, Esquire

2335Department of Management Services

2339Suite 160

23414050 Esplanade Way

2344Tallahassee, Florida 32399

2347(eServed)

2348Dan Drake, Director

2351Division of Retirement

2354Department of Management Services

2358Post Office Box 9000

2362Tallahassee, Florida 32315 - 9000

2367(eServed)

2368J. Andrew Atkinson, General Counsel

2373Office of the Gener al Counsel

2379Department of Management Services

23834050 Esplanade Way, Ste. 160

2388Tallahassee, Florida 32399 - 0950

2393(eServed)

2394NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

2400All parties have the right to submit written exceptions within

241015 days from the date of this Recomme nded Order. Any exceptions

2422to this Recommended Order should be filed with the agency that

2433will issue the Final Order in this case.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 03/18/2016
Proceedings: Agency Final Order filed.
PDF:
Date: 03/17/2016
Proceedings: Agency Final Order
PDF:
Date: 01/22/2016
Proceedings: Recommended Order
PDF:
Date: 01/22/2016
Proceedings: Recommended Order (hearing held December 7, 2015). CASE CLOSED.
PDF:
Date: 01/22/2016
Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
PDF:
Date: 12/28/2015
Proceedings: Respondents Proposed Recommended Order filed.
PDF:
Date: 12/22/2015
Proceedings: (Petitioner's Proposed) Order filed.
Date: 12/15/2015
Proceedings: Transcript of Proceedings (not available for viewing) filed.
Date: 12/07/2015
Proceedings: CASE STATUS: Hearing Held.
PDF:
Date: 12/04/2015
Proceedings: Respondent's Notice Of Filing Second Motion For Attorney Fees With Petitioner's Counsel filed.
PDF:
Date: 12/03/2015
Proceedings: Notice of Transfer.
PDF:
Date: 12/02/2015
Proceedings: Respondents Notice of Filing Exhibits filed.
PDF:
Date: 12/02/2015
Proceedings: Order Denying Motion to Strike.
Date: 12/02/2015
Proceedings: Respondent's Proposed Exhibits filed (exhibits not available for viewing).
PDF:
Date: 12/02/2015
Proceedings: Respondent's Notice of Filing Exhibits filed.
PDF:
Date: 12/02/2015
Proceedings: Respondent's Pre Hearing Statement filed.
PDF:
Date: 12/01/2015
Proceedings: Respondent's Response to, and Motion to Dismiss with Prejudice, Petitioner's Motion to Strike Agency's Motion for Attorney's Fees filed.
PDF:
Date: 11/24/2015
Proceedings: Petitioner's Prehearing Statement filed.
PDF:
Date: 11/24/2015
Proceedings: Order Granting Motion for Official Recognition.
PDF:
Date: 11/24/2015
Proceedings: Petitioner's Response to and Motion to Strike the Agency's Motion for Attorney Fees filed.
PDF:
Date: 11/23/2015
Proceedings: Respondent's Motion for Official Recognition of Retirement Guide for the Regular Class, 2006 Edition filed.
PDF:
Date: 11/18/2015
Proceedings: Notice of Filing Petitioner's Response to the Administrative Law Judge's Order of November 12, 2015, Compelling Discovery Responses filed.
PDF:
Date: 11/13/2015
Proceedings: Respondents Notice of Filing Motion for Attorney Fees with Petitioners Counsel filed.
PDF:
Date: 11/13/2015
Proceedings: Order Granting Motion for Official Recognition.
PDF:
Date: 11/12/2015
Proceedings: Order Granting Motion for Official Recognition.
PDF:
Date: 11/12/2015
Proceedings: Order on Motion to Compel.
Date: 11/09/2015
Proceedings: Petitioner's Motion to Compel Discovery Answers and Responses Exhibit 1 filed (not available for viewing).
PDF:
Date: 11/09/2015
Proceedings: Petitioner's Reply to Respondent's Motion to Compel Discovery filed.
PDF:
Date: 11/06/2015
Proceedings: Respondent's Motion to Compel Discovery Answers and Reponses filed.
PDF:
Date: 11/05/2015
Proceedings: Respondent's Notice of Filing First Supplemental Discovery Answers and Responses filed.
PDF:
Date: 11/03/2015
Proceedings: Respondent's Notice of Intent to Offer Certified Business Record as Evidence at Final Hearing filed.
PDF:
Date: 10/28/2015
Proceedings: Respondent's Notice of Submitting Discovery Answers and Responses to Petitioner filed.
PDF:
Date: 10/27/2015
Proceedings: Part II of Governors Reference Manual for Notaries filed.
PDF:
Date: 10/27/2015
Proceedings: Part I of Governors Reference Manual for Notaries filed.
PDF:
Date: 10/27/2015
Proceedings: Petitioners Motion For Official Recognition of Governors Reference Manual For Notaries filed.
PDF:
Date: 10/26/2015
Proceedings: Respondent's Motion for Official Recognition of Statutes and Rules filed.
PDF:
Date: 10/21/2015
Proceedings: Respondent's Notice of Submitting Second Discovery Request to Petitioner filed.
PDF:
Date: 10/15/2015
Proceedings: Petitioner's Notice of Serving Discovery to Respondent filed.
PDF:
Date: 10/12/2015
Proceedings: Respondent's Notice of Submitting Combined First Discovery Request to Petitioner filed.
PDF:
Date: 10/09/2015
Proceedings: Petitioner's Request that the Administrative Law Issue Subpoenas in this Case filed.
PDF:
Date: 10/02/2015
Proceedings: Order of Pre-hearing Instructions.
PDF:
Date: 10/02/2015
Proceedings: Notice of Hearing by Video Teleconference (hearing set for December 7, 2015; 9:30 a.m.; Tampa and Tallahassee, FL).
PDF:
Date: 10/01/2015
Proceedings: Agreed Response to Initial Order filed.
PDF:
Date: 09/29/2015
Proceedings: Initial Order.
PDF:
Date: 09/25/2015
Proceedings: Agency action letter filed.
PDF:
Date: 09/25/2015
Proceedings: Petition for Review filed.
PDF:
Date: 09/25/2015
Proceedings: Agency referral filed.

Case Information

Judge:
J. LAWRENCE JOHNSTON
Date Filed:
09/25/2015
Date Assignment:
12/02/2015
Last Docket Entry:
03/18/2016
Location:
Tampa, Florida
District:
Middle
Agency:
ADOPTED IN TOTO
 

Counsels

Related Florida Statute(s) (4):