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

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.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JAMES B. ANDERSON,

Petitioner,

vs. Case No. 15 - 5416

DEPARTMENT OF MANAGEMENT

SERVICES, DIVISION OF

RETIREMENT,

Respondent.

_______________________________/

RECOMMENDED ORDER

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

this case by video teleconferencing, with sites in Tampa and

Tallahassee, before J. Lawrence Johnston, Administrative Law

Judge, Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Nicholas E. Karatinos, Esquire

Law Office of Karatinos

Suite 101

18920 North Dale Mabry Highway,

Lutz, Fl orida 33548

For Respondent: Joe M. Thompson, Esquire

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

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

deceased retiree in the Florida Retirement S ystem Pension Plan,

selected Option 1 (maximum retireeÓs monthly benefit without any

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

reduced retireeÓs monthly benefit with continued spousal benefit

after death of the retiree).

PRELIMINARY STAT EMENT

Mr. Anderson was a retiree in the Florida Retirement System

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

widow, Mitzi Anderson, contacted the Department of Management

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

not due a spousal benefit.

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

Retirement a certified letter requesting a spousal benefit, which

was denied.

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

in the name of her deceased husband to challenge the intended

denial. The Division of Retirement forwarded the petition to

DOAH for a hearing.

On November 13, the Respondent filed a Notice of Filing

Motion for Attorney Fees with PetitionerÓs Counsel. On

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

motion to strike for filing the motion without complying with the

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

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

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

compliance with the safe harbor provision.

The parties filed separate pre - hearing statements instead of

a joint pre - hearing stipulation, supposedly because they could

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

comparison of the two pre - hearing statements revealed that the

disputes between the parties were narrow.

One difference between the partiesÓ pre - hearing statements

was the PetitionerÓs statement that the RespondentÓs motion for

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

RespondentÓs statement that only the PetitionerÓs motion to

strike the motion for attorneyÓs fees was pending. Two days

after the RespondentÓs pre - hearing statement, the Respondent

filed a Notice of Filing Second Motion for Attorney Fees with

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

has been filed by the Respondent to date.

The DOAH hearing confirmed that the dispute between the

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

Petit ioner sought to admit all of the RespondentÓs Exhibits in

evidence, but the Respondent objected and insisted that the

Petitioner move exhibits into evidence during the PetitionerÓs

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

that admitted virtually every fact asserted by the Respondent.

The Petitioner called Donna Pepper and Mitzi Anderson to

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

evidence. The Respondent called Theresa Bach, Allison Olson,

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

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

into evidence without objection. The Respondent also had

pertinent statutes and rules, a reference manual for Florida

notaries, and a 2006 retirement guid e officially recognized and

admitted into evidence.

The Transcript of the final hearing was filed on

December 15, 2015. The parties filed proposed recommended orders

that have been considered in preparation of this Recommended

Order.

FINDING S OF FACT

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

Anderson, terminated his employment with the University of South

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

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

pension ben efits under the Florida State Retirement System

Pension Plan.

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

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

USFÓs Director of Insurance and Risk Management, acknowledged

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

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

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

be when he cashed or deposited any benefit payment.

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

Anderson, executed a Statutory Official Form FRS 110 before a

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

provides the maximum pension benefits to Mr. Anderson until his

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

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

a continuing benefit after Mr. AndersonÓs death and that the

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

deposited any benefit payment.

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

the Division of Retirement, which mailed Mr. Anderson an

acknowledgement of receipt of the executed form. The

acknowledgement included a clear statement, in bold print, that

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

selection after retirement and that his retirement would become

final when he cashed or deposited any benefit payment.

5 . Mr. Anderson had second thoughts about his benefit

option selection and contacted Donna Pepp er, a retirement

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

which would give him a reduced pension benefit that would

continue and be paid to his wife after his death.

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

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

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

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

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

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

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

to the Division of Retirement as soon as possible.

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

on the Integrated Retirement Infor mation System (IRIS) telephone

log, documenting that Mr. Anderson was considering changing his

benefit option selection and would Ðeither FAX a form with a

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

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

retirement payroll was asked to hold Mr. AndersonÓs first check

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

another comment was added to document that Mr. Anderson had

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

Jan Steller had been called back and asked Ðto release his

check.Ñ

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

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

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

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

cashed.

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

the same amount was sent to Mr. Anderson.

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

two benefit checks into his Bank of America account. He

continued to receive and cash or deposit monthly Option 1 benefit

checks through January 2015.

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

notified the Division of Retirement, which stopped benefit

payments in accordance with Mr. AndersonÓs Option 1 selection.

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

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

Notwithstanding the telephonic communications with the D ivision

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

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

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

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

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

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

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

Retirement and requested Option 3 spousal benefit payme nts.

13 . The Division of Retirement denied Mrs. AndersonÓs

request because it did not receive an Option 3 benefit selection

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

evidence that the form was sent to the Division of Retirement

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

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

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

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

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

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

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

deciding not to send it to the Division of Retirement.

CONCLUSION S OF LAW

14. The Respondent administers the Florida Retirement

System under chapter 121, Florida Statutes (2015).

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

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

guide are clear that the benefit option must be selected before

retirement and is Ðfinal and irrevocable at the time a benefit

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

Stat. (2015).

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

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

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

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

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

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

1977)(unless otherwise provided by statute, the party asserting

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

standard of proof is a preponderance of the evidence.

§ 120.57(1)(j), Fla. Stat .

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

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

that he chose Option 1 and received monthly benefits accordingly

for over seven years.

18. The Petitioner takes the position that he chose Option

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

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

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

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

option selection form must be sent to and received by the

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

a benefit option selection. This tortured reading of the

statutes, rules, and retirement guide is unreasonable a nd

untenable. It would mean that the Division of Retirement would

never know what benefit option a retiree selected because there

always would be the possibility of an executed and notarized

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

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

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

interpretation of a statute that would lead to an unreasonable,

absurd, or ridiculous result, provided the language of the

statute is susceptible of an alternative interpretation.Ñ).

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

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

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

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

cashed or deposited benefit checks for almost a year, then

attempted to change to disability benefits. The Respondent held

that the choice of early retirement benefits was final and

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

agencyÓs interpretations of statutes it administers and rules it

promulgates are given deference and will not be overturned by a

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

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

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

384, 386 (Fla. 1st DCA 1987); Natelson v. DepÓt of Ins. , 454 So.

2d 31, 32 (Fla. 1st DCA 1984). Here, the RespondentÓs

interpretations of its statut es and rules are very reasonable.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Management

Services, Division of Retirement, enter a final order finding

that Mr. Anderson selected benefit Option 1, finally and

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

spousal benefits.

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

Tallahassee, Leon County, Florida.

S

J. LAWRENCE JOHNSTO N

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of January , 2016 .

COPIES FURNISHED:

Nicholas E. Karatinos, Esquire

Law Office of Karatinos

Suite 101

18920 North Dale Mabry Highway

Lutz, Florida 33540

(eServed)

Joe Thompson, Esquire

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 32399

(eServed)

Dan Drake, Director

Division of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32315 - 9000

(eServed)

J. Andrew Atkinson, General Counsel

Office of the Gener al Counsel

Department of Management Services

4050 Esplanade Way, Ste. 160

Tallahassee, Florida 32399 - 0950

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

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

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.