16-000429 Lettie Jones vs. Department Of Management Services, Division Of State Retirement Status: Closed Recommended Order on Tuesday, October 25, 2016.

Summary: Petitioner did not prove by a preponderance of the evidence that the FRS member (her deceased husband) was incapacitated at the time he elected benefit Option 2, or that she was otherwise entitled to receive benefits pursuant to Option 3.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LETTIE JONES,

Petitioner,

vs. Case No. 16 - 0429

DEPARTMENT OF MANAGEMENT

SERVICES, DIVISION OF

RETIREMENT,

Respondent.

_______________________________/

RECOMMENDED ORDER

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

on September 29, 2016, in Talla hassee, Florida, before

Suzanne Van Wyk, Administrative Law Judge of the Division of

Administrative Hearings (Division).

APPEARANCES

For Petitioner: Lettie Jones, pro se

14304 John Henry Road

Tallahassee, Florida 32312

For Respondent: Thomas E. Wright, Esquire

Office of the General Counsel

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 32399 - 0950

STATEMENT O F THE ISSUE

Whether Petitioner is entitled to receive Florida

Retirement System (FRS) benefits from her deceased spouseÓs

retirement account, pursuant to FRS Option 3 (lifetime monthly

benefit to joint annuitant).

PRELIMINARY STATEMENT

Petitioner was notif ied by letter dated January 24, 2014,

following the death of her spouse, James Jones (an FRS member),

that the retirement system benefit payment option he had elected

did not provide for a continuing benefit beyond the month of

death. On PetitionerÓs beha lf, PetitionerÓs daughter requested

monthly benefits be paid to Petitioner. By letter dated

April 7, 2014, Respondent denied the request for monthly benefit

payments, explaining that monthly benefits ceased the first of

the month following the memberÓs de ath, pursuant to FRS

Option 2. On May 9, 2014, PetitionerÓs daughter filed, on

PetitionerÓs behalf, a petition for administrative hearing to

challenge the agencyÓs decision (Petition).

Respondent forwarded the Petition to the Division on

January 27, 2016. 1/ The matter was originally scheduled for

hearing on March 8, 2016, but was continued twice due to

PetitionerÓs health, and finally rescheduled for September 29,

2016.

The final hearing commenced as rescheduled. Petitioner

testified on her own behalf an d presented the testimony of her

daughter, Kimberly Jones. Petitioner offered no exhibits in

evidence.

Respondent presented the testimony of David Heidel,

RespondentÓs Benefits Administrator. RespondentÓs Exhibits 1

through 10 were admitted in evidence.

The final hearing was recorded, but neither party ordered a

transcript of the proceedings. As such, the partiesÓ post -

hearing filings were due on or before October 10, 2016.

Respondent timely filed a Proposed Recommended Order, which has

been considered in preparation of this Recommended Order. On

October 18, 2016, Petitioner filed a request for an extension of

time to file a proposed recommended order , which was denied.

FINDING S OF FACT

1. Petitioner, Lettie Jones, is the wife of FRS member,

James Jon es, and a designated beneficiary of his FRS account.

2. Respondent, Department of Management Services, Division

of Retirement, is the state agency with the responsibility to

administer the FRS.

Background Findings

3. Mr. Jones applied to the State of Flo rida for

disability retirement on July 13, 1994. On his application,

Mr. Jones noted that the Ð[m]uscles in [his] feet and legs

[were] deteriorating.Ñ In response to a question regarding any

other physical impairments, Mr. Jones answered, ÐLosing strengt h

in right hand.Ñ

4. The record does not reflect the effective date of

Mr. JonesÓ retirement.

5. Mr. Jones suffered a stroke in April 1996.

6. On January 27, 1997, Mr. Jones obtained from the state

an ÐEstimate of Disability Retirement BenefitsÑ listing the

approximate monthly benefit payment amounts for all four FRS

payment options. On that date, Mr. Jones also obtained

Form 11o, the FRS retirement benefit election option form, and

Form FST 12, the FRS beneficiary designation form.

7. On March 18, 199 7, Mr. Jones executed Form 11o,

choosing Option 2 for payment of his monthly retirement

benefits, and Form FST 12, designating Petitioner as primary

beneficiary, and his daughter as contingent beneficiary, of his

retirement account.

8. Form 11o provides t he following explanation of

Option 2:

A reduced monthly benefit payable for my

lifetime. If I die before receiving 120

monthly payments, my designated beneficiary

will receive a monthly benefit in the same

amount as I was receiving until the monthly

benef it payments to both of us equal 120

payments. No further benefits are then

payable.

9. Form 11o requires the spouse Ós signature acknowledging

the memberÓs election of Option 2.

10. The spousal acknowledgment section appears in a box on

Form 11o followi ng the description of Options 1 and 2. The

first line inside the box reads, in all capital letters, ÐTHIS

SECTION MUST BE COMPLETED IF YOU SELECT OPTION 1 OR 2.Ñ

11. On March 18, 1997, Petitioner signed the box on Form

11o acknowledging her husbandÓs ele ction of Option 2.

12. Mr. Jones received more than 120 monthly retirement

benefit payments prior to his death in 2013.

PetitionerÓs Challenge

13. Petitioner alleges that Mr. Jones lacked the capacity

to make an informed election of benefit payments on M arch 18,

1997, because he had reduced cognitive function.

14. Both Petitioner and her daughter testified that they

accompanied Mr. Jones to the FRS office on March 18, 1997, but

were not allowed to Ðgo backÑ with him when he met with an FRS

employee to se lect his retirement option and execute Form 11o. 2/

15. Petitioner admitted th at she did sign the box on

Form 11o, which acknowledges spousal election of Option 2, but

testified that the form was blank at the time her husband

presented it to her for signat ure.

16. Petitioner signed the spousal acknowledgment on

Form 11o the same day her husband executed the form.

17. Petitioner introduced no evidence, other than the

testimony of her daughter, that Mr. Jones suffered from reduced

cognitive function on Marc h 18, 1997.

18. The fact that Mr. Jones suffered a stroke in 1996 is

insufficient evidence to prove that he lacked the mental

capacity to make an informed retirement option selection on the

date in question.

CONCLUSIONS OF LAW

19. Respondent administers the FRS under chapter 121,

Florida Statutes (2013). 3/

20. Section 121.091(6)(a)2. and 3. set out the Option 2

and Option 3 benefit options as follows:

(6) OPTIONAL FORMS OF RETIREMENT BENEFITS

AND DISABILITY RETIREMENT BENEFITS. Ï

(a) Prior to the recei pt of the first

monthly retirement payment, a member shall

elect to receive the retirement benefits to

which he or she is entitled under subsection

(1), subsection (2), subsection (3), or

subsection (4) in accordance with one of the

following options:

* * *

2. A decreased retirement benefit payable

to the member during his or her lifetime

and, in the event of his or her death within

a period of 10 years after retirement, the

same monthly amount payable for the balance

of such 10 - year period to his or her

beneficiary or, in case the beneficiary is

deceased, in accordance with subsection (8)

as though no beneficiary had been named.

3. A decreased retirement benefit payable

during the joint lifetime of both the member

and his or her joint annuitant and whi ch,

after the death of either, shall continue

during the lifetime of the survivor in the

same amount, subject to the provisions of

subsection (12).

* * *

The spouse of any member who elects to

receive the benefit provided under

subparagraph 1. or subpara graph 2. shall be

notified of and shall acknowledge any such

election.

21. The governing statute is 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

§ 1 21.091(6)(h), Fla. Stat.

22. In this case, Petitioner -- nominally Mr. Jones, but

actually his widow -- has the burden to prove entitlement to

Option 3 benefit payments. See Wilson v. DepÓt of Admin., Div.

of Ret. , 538 So. 2d 139, 141 - 142 (Fla. 4th DCA 1989) ; Fla. DepÓt

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

Balino v. DepÓt of HRS , 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

stand ard of proof is a preponderance of the evidence.

§ 120.57(1)(j), Fla. Stat. (2016).

23. Here Petitioner argues that Mr. JonesÓ choice of

Option 2 benefits should be nullified because he suffered from

diminished mental capacity at the time the election wa s made.

24. Petitioner is, in effect, asking the Division to

cancel or rescind a written legal instrument. Such action Ðis

essentially equitable in character, the granting of which

depends upon application of equitable principles as

distinguished from su bstantive rules of law.Ñ Davis v. McGahee ,

257 So. 2d 62, 64 (Fla. 1st DCA 1972); see also Royal v. Parado ,

462 So. 2d 849, 853 (Fla. 1st DCA 1985)(holding that rescission

is an equitable remedy).

25. A court, exercising its equitable powers, may order

t he rescission or cancellation of an instrument based upon a

showing of mental incompetency. See Hartnett v. Lotauro , 82 So.

2d 362, 364 (Fla. 1955); Long v. Moore , 626 So. 2d 1387, 1388

(Fla. 1st DCA 1993)(ÐThe mental incompetence of one party to a

real e state transaction, rendering him unable to understand the

effect and significance of his actions, warrants rescission of

the transaction.Ñ); Gilmore v. Life Care Ctrs. of Am. , 2010

LEXIS 111147 *7 (M.D. Fla. 2010)(ÐUnder Florida law, a person

lacks the men tal capacity to enter into a contract only if she

is unable to understand the effect and significance of her

actions, i.e., is unable to comprehend the effect and nature of

the transaction.Ñ).

26. It is questionable whether the Division, which is an

admin istrative, rather than judicial body, has the authority to

rescind a transaction upon a showing of mental incompetency.

Ð[A]lthough the legislature has the power to create

administrative agencies with quasi - judicial powers, the

legislature cannot authoriz e those agencies to exercise powers

that are fundamentally judicial in natureÑ such as the grant of

an equitable remedy. Broward Cnty. v. La Rosa , 505 So. 2d 422,

423 (Fla. 1st DCA 1987), citing Biltmore Constr. Co. v. DepÓt

of Gen. Servs. , 363 So. 2d 85 1, 854 (Fla. 1st DCA 1978).

27. Assuming, arguendo, the Division has the authority to

rescind Mr. JonesÓ retirement benefit election of Option 2,

Petitioner failed to prove by a preponderance of the evidence

that Mr. Jones was mentally incompetent at the time the election

was made. The only evidence presented was testimony regarding

Mr. JonesÓ stroke event the year prior to making his retirement

option election. The mere fact of a stroke, and any

accompanying physical weakness, is insufficient to prove m ental

incompetence.

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 denying

the relief requested in the Petition for Ad ministrative Hearing.

DONE AND ENTERED this 25th day of October , 2016 , in

Tallahassee, Leon County, Florida.

S

SUZANNE VAN WYK

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 25th day of October , 2016 .

ENDNOTE S

1/ There is no record explanation for RespondentÓs delay in

forwarding t his matter to the Division.

2/ This testimony is contrary to PetitionerÓs statements in her

Petition that Ð [Both] f amily and deceased were present at the

time stated, March 18, 1997, but appeal the decision of the

option that was said to be chosen . . . . [Option 3] is the

option that was discussed and stated by the representative to

what the deceased was signing.Ñ

3/ Unless otherwise specified, all references herein to the

Florida Statutes are to the 2013 version, which was in effect

when the Petition was filed.

COPIES FURNISHED:

Lettie Jones

C/O Kim Jones

14304 John Henry Road

Tallahassee, Florida 32312

Thomas E. Wright, Esquire

Office of the General Counsel

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 3239 9 - 0950

(eServed)

Elizabeth Stevens, Director

Division of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32315 - 900 0

(eServed)

J. Andrew Atkinson, General Counsel

Office of the General Counsel

Department of Managem ent Services

4050 Esplanade Way , Suite 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 Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.