18-005787 Michael A. Fewless vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Thursday, July 18, 2019.

Summary: Petitioner proved that Respondent should be equitably estopped from requiring him to repay $541,780.03 of retirement benefits.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MICHAEL A. FEWLESS,

Petitioner,

vs. Case No. 18 - 5787

DEPARTMENT OF MANAGEMENT

SERVICES, DIVISION OF

RETIREMENT,

Respondent.

_______________________________/

RECOMMENDED ORDER

Pu rsuant to notice, a formal administrative hearing was

conducted before Administrative Law Judge Garnett W. Chisenhall

of the Division of Administrative Hearings (ÐDOAHÑ) in

Tallahassee, Florida on April 22 and 23, 2019.

APPEARANCES

For Petitioner: Ryan Jo shua Andrews, Esquire

Brian O. Finnerty, Esquire

Johana E. Nieves, Esquire

The Law Offices of Steven R. Andrews, P.A.

822 North Monroe Street

Tallahassee, Florida 32303

For Respondent: Thomas E. Wright, Esquire

Sean W. Gillis , Esquire

Office of the Gene ral Counsel

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

Whether the Department of Management Services, Division of

Retirement (Ðthe DepartmentÑ) should be equitably estopped from

requi ring Michael A. Fewless to return $541,780.03 of retirement

benefits.

PRELIMINARY STATEMENT

The Department issued a letter to Mr. Fewless on August 31,

2018, notifying him that his request to be relieved from repaying

benefits received from the Florida Ret irement System (ÐFRSÑ) had

been denied. In support thereof, the Department explained that:

As addressed in the letter to you dated

August 15, 2018 (enclosed), you were employed

with the City of Fruitland Park on August 3,

2015, following your Deferred Ret irement

Option Program (DROP) termination from the

Orange County SheriffÓs Office on August 1,

2015. The City of Fruitland Park is an FRS

participating employer for police and general

employees. Due to your employment with the

City of Fruitland Park on A ugust 3, 2015, you

never satisfied the FRS termination

requirement of ceasing all employment with

FRS employers for six calendar months as

provided in 121.021(39)(b), Florida Statutes.

As a result, your FRS DROP retirement is

voided and you are required t o repay all

retirement benefits, as provided in Rule 60S -

4.012, Florida Administrative Code. Your FRS

membership will be retroactively established

to June 1, 2011, the date you initially began

DROP participation.

The DepartmentÓs August 15, 2018, letter h ad notified Mr. Fewless

that he was required to repay $541,780.03 to the Department.

On September 25, 2018, Mr. Fewless filed a petition

requesting a formal administrative hearing and asserted therein

that the Department was equitably estopped from req uiring

repayment because a Department employee provided incorrect advice

over an FRS hotline.

The Department referred the instant case to DOAH on

November 1, 2018, and the undersigned scheduled the final hearing

to occur on December 21, 2018.

After Mr. Fewless filed an unopposed motion to continue,

the undersigned rescheduled the final hearing to occur on

February 25, 28, and March 1, 2019. The parties filed a joint

motion to continue on January 29, 2019, and the undersigned

rescheduled the final heari ng for April 22 through 24, 2019.

The final hearing was convened as scheduled on April 22,

2019, and concluded on April 23, 2019. In addition to testifying

on his own behalf, Mr. Fewless presented the testimony of Kathy

Fabrizio, Todd McCullough, Laurie Fewless, Joyce Morgan, Kathy

Gould, and Cara Anderson. Mr. Fewless presented the testimony of

Diana Kolcun and Richard Ranize via deposition. During the

rebuttal portion of his case, Mr. Fewless presented testimony

from himself and David Kent.

The Dep artment presented the testimony of Gary LaVenia,

Ms. Morgan, Ms. Anderson, Mr. Kent, and Ms. Gould.

The following exhibits from Mr. Fewless were accepted into

evidence: 2, 5 through 8, 15, 22, 49 through 51, 57, 66 ,

67, and 70. The undersigned reserve d ruling on the admissibility

of Mr. FewlessÓs Exhibit 68 and hereby declines to accept it into

evidence due to redundancy and a lack of relevant information.

The Department introduced Exhibits 4, 5, and 7 into

evidence, and the parties jointly i ntroduce d J oint Exhibits 1

through 7 into evidence.

At the close of the final hearing, the undersigned granted

an ore tenus motion that the deadline for the partiesÓ proposed

recommended orders be extended to 30 days from the filing of the

hearing transcript.

The five - volume hearing Transcript was filed with DOAH on

May 17, 2019, and the partiesÓ timely filed their proposed

recommended orders on June 17, 2019.

FINDING S OF FACT

The following findings are based on witness testimony,

exhibits, and information subj ect to official recognition.

FRS and the Termination Requirement

1. FRS is a qualified plan under section 401(a) of the

Internal Revenue Code and has over 500,000 active pension plan

members. The Department administers FRS so that it will maintain

its st atus as a qualified pension plan und er the Internal Revenue

Code.

2. Section 121.091(13), Florida Statutes (2018) , 1/ describes

the benefits available to FRS members through the ÐDeferred

Retirement Option Program (ÐDROPÑ):

In general, and subject to t his section, the

Deferred Retirement Option Program,

hereinafter referred to as DROP, is a program

under which an eligible member of the Florida

Retirement System may elect to participate,

deferring receipt of retirement benefits

while continuing employmen t with his or her

Florida Retirement System employer. The

deferred monthly benefits shall accrue in the

Florida Retirement System on behalf of the

member, plus interest compounded monthly, for

the specified period of the DROP

participation, as provided in paragraph (c).

Upon termination of employment, the member

shall receive the total DROP benefits and

begin to receive the previously determined

normal retirement benefits.

3. Section 121.091 specifies that Ð[b]enefits may not be

paid under this section unless the member has terminated

employment as provided in s. 121.021(39)(a). . . .Ñ

4. Section 121.021(39)(a) generally provides that

ÐterminationÑ occurs when a member ceases all employment

relationships with participating employers. However, Ðif a

m ember is employed by any such employer within the next 6

calendar months, termination shall be deemed not to have

occurred.Ñ £ 121.021(39)(a)2., Fla. Stat.

5. Moreover, the employee and the re - employing FRS agency

will be jointly and severally liable for reimbursing any

retirement benefits paid to the employee. § 121.091(9)(c)3.,

Fla. Stat. 2/

6. The termination requirement is essential to the FRS

maintaining its status as a qualified plan under IRS regulations .

As a qualified plan, taxes on FRS benef its are deferred. 3/

7. The DepartmentÓs position is that after an entity

becomes a participating employer, all new hires within covered

categories are Ðcompulsory membersÑ of the FRS. If an entity has

a local pension plan, then that entity must either cl ose the plan

before joining FRS or keep the plan open for members who exercise

their right to remain in that plan. However, even if the entity

chooses to keep the local plan open for current members, the

local plan is closed to new members.

8. The City of Fruitland Park, Florida (ÐFruitland ParkÑ) ,

became an FRS employer on February 1, 2015. The mayor and

commissioners of Fruitland Park passed a resolution on

November 20, 2014, providing in pertinent part, that:

It is hereby declared to be the policy and

purpose of the City Commission of Fruitland

Park, Florida that all of its General

Employees and police officers , except those

excluded by law, shall participate in the

Florida Retirement System as authorized by

Chapter 121, Florida Statutes. All Gener al

Employees and police officers shall be

compulsory members of the Florida Retirement

System as of the effective date of

participation in the Florida Retirement

System so stated therein.

(emphasis added).

9. The Department notified Fruitland Park d uring its

enrollment into FRS that all new hires were compulsory members of

FRS for covered groups.

Facts Specific to the Instant Case

10 . After graduating from the Central Florida Police

Academy in 1985, Mr. Fewless began working for the Orange Count y

SheriffÓs Office (ÐOCSOÑ) as a deputy sheriff and patrolled what

he describes as Ðthe worst area of Orange County.Ñ 4/

11 . After five years, Mr. Fewless transferred into the

detective bureau in OCSOÓs crim inal investigations division.

Mr. Fewless re ceived a promotion to corporal two years later and

returned to patrolling. 5/

1 2 . Mr. Fewless soon received a transfer to OCSOÓs special

investigationÓs division and worked in the gang enforcement

unit. 6/ It was not long before he was promoted to sergeant and

sent Ðback to the road.Ñ

1 3 . After 10 months, OCS O asked Mr. Fewless to take over

the gang enforcement unit where he was promoted to lieutenant and

ultimately to captain. 7/ During his tenure as a captain,

Mr. Fewless was in charge of OCSOÓs intern al affairs unit for

five or six years.

1 4 . Mr. Fewless concluded his nearly 30 - year tenure with

OCSO as the d irector of the Fusion Center and the Captain of the

criminal intelligence section. 8/

1 5 . In sum, Mr. FewlessÓs service with OCSO was exemplary,

and he was never the subject of any disciplinary actions.

1 6 . Mr. Fewless entered the DROP program on June 1, 2011.

As a result, he was scheduled to complete his DROP tenure and

retire on May 31, 2016. On June 1, 2011, Mr. Fewless signed a

standardiz ed FRS document entitled ÐNotice of Election to

Participate in the Deferred Retirement Option Program (DROP) and

Resignation of Employment.Ñ That document contained the

following provisions:

I elect to participate in the DROP in

accordance with s. 121.091 (13), Florida

Statutes (F.S.), as indicated below, and

resign my employment on the date I terminate

from the DROP. I understand that the

earliest date my participation in the DROP

can begin is the first date I reach normal

retirement date as determined by law and that

my DROP participation cannot exceed a maximum

of 60 months from the date I reach my normal

retirement date, although I may elect to

participate for less than 60 months.

Participation in the DROP does not guarantee

my employment for the DROP period.

I understand that I must terminate all

employment with FRS employers to receive a

monthly retirement benefit and my DROP

benefit under Chapter 121, F.S. Termination

requirements for elected officers are

different as specified in

s. 121.091(13)(b)( 4), F.S. I cannot add

service, change options, change my type of

retirement or elect the Investment Plan after

my DROP begin date. I have rea d and

understand the DROP Accrual and Distribution

information provided with this form.

1 7 . Mr. Fewless rea lized by 2015 that he was not ready to

leave law enforcement. However, he was scheduled to retire from

OCSO by May 31, 2016.

1 8 . Mr. Fewless had several friends who left OCSO as

captains and took police chief positions with municipalities in

Florida. Therefore, in anticipation of a lengthy job search, he

began looking for such a position in approximately March of 2015.

1 9 . Mr. Fewless applied to become Fruitland ParkÓs police

chief on March 26, 2015 , and was offered the job in June of 2015

by Fruitlan d ParkÓs city manager, Gary LaVenia.

20 . Mr. Fewless learned from Mr. LaVenia that Fruitland

Park had joined FRS and told him that he could not work within

the FRS system. Mr. LaVenia then erroneously told Mr. Fewless

that he would not be violating any F RS conditions (and thus

forfeiting his DROP payout) because Fruitland Park had a separate

city pension plan into which Mr. Fewless could be enrolled. As

noted above, Fruitland Park had passed a resolution mandating

that Ð[a]ll General Employees and police officers shall be

compulsory members of the Florida Retirement System as of the

effective date of participation in the Florida Retirement

System. . . .Ñ

21 . While Mr. Fewless was pleased with what Mr. LaVenia

told him, he called an FRS hotline on July 9 , 2015, in order to

verify that he would not be endangering his retirement benefits

by accepting the police chief position with Fruitland Pa rk.

2 2 . Mr. FewlessÓs question was routed to David Kent, and

Mr. Fewless described how he was going to work for Fru itland Park

and that Fruitland Park was an FRS employer.

2 3 . Mr. Kent told Mr. Fewless that he could go to work for

Fruitland Park immediately without violating any FRS requirements

so long as he was not enrolled into the FRS system. Instead of

being a n FRS enrollee, Mr. Kent stated that Mr. Fewless could

enroll into Fruitland ParkÓs pension plan or enter a third - party

contract. 9/

2 4 . Mr. Fewless assumed that Mr. Kent was an FRS expert and

remembers that Mr. Kent sounded very confident in the informati on

he relayed over the telephone.

2 5 . On July 14, 2015, Mr. Fewless filled out and signed a

form entitled ÐFlorida Retirement Systems Pension Plan Deferred

Retirement Option Program (DROP) Termination Notification.Ñ The

form indicates that Mr. Fewles s would be ending his employment

with OCSO on August 1, 2015. In addition, the form notified

Mr. Fewless of the requirements associated with receiving his

accumulated DROP and monthly benefits:

According to our records, your DROP

termination date is 08/01 /2015 . You must

terminate all Florida Retirement System (FRS)

employment to receive your accumulated DROP

benefits and begin your monthly retirement

benefits. You and your employerÓs authorized

representative must complete this form

certifying your DROP employment termination.

Termination Requirement:

In order to satisfy your employment

termination requirement, you must

terminate all employment relationships

with all participating FRS employers for

the first 6 calendar months after your

DROP terminatio n date. Termination

requirement means you cannot remain

employed or become employed with any FRS

covered employer in a position covered

or noncovered by retirement for the

first 6 calendar months following your

DROP termination date. This includes

but is not limited to: part - time work,

temporary work, other personal services

(OPS), substitute teaching, adjunct

professor or non - Division approved

contractual services.

Reemployment Limitation:

You may return to work for a

participating FRS employer during the

7 th Î 12 th calendar months following your

DROP termination date, but your monthly

retirement benefit will be suspended for

those months you are employed. There

are no reemployment limitations after

the 12 th calendar month following your

DROP terminat ion date.

If you fail to meet the termination

requirement, you will void (cancel) your

retirement and DROP participati on and you

must repay all retirement benefits received

(including accumulated DROP benefits). If

you void your retirement, your employer will

be responsible for making retroactive

retirement contributions and you will be

awarded service credit for the period during

which you were in DROP through your new

employment termination date. You must apply

to establish a future retirement date. Y our

eligibility for DROP participation will be

determined by your future retirement date and

you may lose your eligibility to participate

in DROP. [10/]

(emphasis in original).

Mr. FewlessÓs Reliance on the Representations Made to Him

2 6 . Mr. Fewless placed complete trust in the

representations made during his July 9, 2015, phone call to the

FRS hotline and during his discussions with Fruitland ParkÓs city

manager.

2 7 . When he left OCSO and accepted the police chief

position with Fruitland Park, Mr. Fewless took a $33,000.00

annual pay cut and stood to receive $70,000.00 less from his DROP

payout. It is highly unlikely he would have accepted those

circumstances if he did not have a good faith basis for believing

he was utilizing an exception to the termination requirement.

2 8 . In the months preceding his departure from OCSO,

Mr. FewlessÓs wife was being treated for a brain tumor.

Following her surgery in May of 2015 and subsequent radiation

treatment, Ms. Fewless returned to work for a month or two .

However, given that the retirement checks Mr. Fewless had begun

to receive were roughly equivalent to what Ms. Fewless had been

earning, she decided to retire in order to spend more time with

their grandchildren.

2 9 . During this timeframe, Mr. and Ms. Fewless decided to

build their Ðdream home,Ñ and Ms. Fewless designed it. They used

a $318,000 .00 lump sum payment from FRS to significantly lower

their monthly house payment. Those actions would not have been

taken if Mr. Fewless had suspected that ther e was any uncertainty

pertaining to his retirement benefits.

The Department Discovers the Termination Violation

30 . In November of 2017, the DepartmentÓs Office of the

Inspector General conducted an audit to assess Fruitland ParkÓs

compliance with FRS r equirements. This audit was conducted in

the regular course of the DepartmentÓs business and was not

initiated because of any suspicion of noncompliance.

31 . The resulting audit report contained the following

findings: (a) Fruitland Park had failed to r eport part - time

employees since joining FRS; (b) Fruitland Park had failed to

report Mr. Fewless as an employee covered by FRS;

(c) Mr. FewlessÓs employment with Fruitland Park amounted to a

violation of FRSÓs reemployment provisions; and (d) Fruitland

Pa rk failed to correctly report retirees filling regularly

established positions.

3 2 . Because he had failed to satisfy the termination

requirement, the Department notified Mr. Fewless via a letter

issued on August 15, 2018, that: (a) his DROP retirement had

been voided; (b) his membership in FRS would be retroactively

reestablished 11/ ; and (c) he was required to repay $541,780.03 of

benefits.

Mr. FewlessÓs Reaction to Learning That He Had Violated the

Termination Requirement

3 3 . Mr. Fewless learned on June 25, 2018, of the

DepartmentÓs determination that he was in violation of the

termination requirement. He responded on July 5, 2018, by

writing the following letter to the Department:

On the evening of, June 25, 2018, I was

notified by Mr. Gary LaVenia , the City

Manager for Fruitland Park, that he was

contacted by members of the State of

FloridaÓs DMS Inspector GeneralÓs office

regarding a problem with my current

retirement plan. No additional information

was shared during this initial telephone

conver sation and we scheduled a meeting for

the following day.

On June 26, 2018, I met with Mr. Gary

LaVenia, Ms. Diane Kolcan, Human Resource

Director and Ms. Jeannine Racine, the Finance

Director regarding this matter. I was

advised that members of the Depar tment of the

Florida Retirement System told them that I

was in violation of receiving my current

retirement benefits because I failed to take

a six month break between my retirement with

the Orange County SheriffÓs Office and

joining the City of Fruitland Park. I

explained to them that there must be some

mistake because I am not currently enrolled

in the Florida Retirement System through the

City of Fruitland Park. The City enrolled me

in their ÐCityÑ pension plan. Mr. LaVenia

agreed with me and we close d the meeting with

me advising them I would do some additional

research on the matter.

* * *

I then reached out to Mr. Chris Carmody, an

attorney with the Gray/Robinson Firm, whom I

worked with on legislative issues in the

past. . . . I explained to him that

according to the Inspector GeneralÓs report,

I needed to have a six month separation

between the Orange County SheriffÓs Office

and the City of Fruitland Park, because both

agencies participated in the Florida

Retirement System. Mr. Carmody still di d not

feel that was a violation because I was not

enrolled in the FRS Plan with the City of

Fruitland Park, but rather their independent

City pension plan. I felt the same way;

however he wanted to continue to research the

issue. A few hours later I rece ived a

telephone call from Mr. Carmody indicating

the problem appears to be that the ÐCityÑ

participates in the FRS Pension Plan and even

though I do not, I would be prohibited from

working there for the six month period.

After hearing this news, I immedi ately

contacted Ms. Amy Mercer, the Executive

Director of the Florida Police ChiefÓs

Association. I explained the dilemma to her

and just like the previously mentioned

individuals she said Ðso what did you do

wrong, that sounds ok to me. . . .Ñ

Ms. Merce r said she would reach out to the

two attorneys that support the Florida Police

ChiefÓs Association to get their opinion of

the situation.

The following morning, Ms. Mercer advised me

that according to Attorney Leonard Dietzen my

actions were in violation of the Florida

Retirement Pension Plan Rules. Mr. Dietzen

explained to her that I needed a six month

separation from my employment with the

Florida Retirement System and the City of

Fruitland Park, because the City participated

in the FRS Pension plan.

Therefore, based on the above information

[and] the realization that an innocent

mistake had been made, please let me explain

my actions:

* * *

In either June or July of 2015, I officially

interviewed for the position of Police Chief

for the City of Frui tland Park. . . .

Approximately one week after the interviews,

I was offered the position of Police Chief

for the City of Fruitland Park.

In July of 2015, I contacted the official FRS

Hotline regarding my potential decision to

join the Fruitland Park Pol ice Department. I

informed them that I was currently employed

with the Orange County SheriffÓs Office and

enrolled in DROP. I advised them that I was

considering accepting the position of police

chief with the City of Fruitland Park;

however I wanted to confirm with them that I

would have no issues with my retirement. I

explained that the City of Fruitland Park was

currently an FRS department; however they

also had a separate ÐCityÑ pension plan which

I was going to be placed in. I wanted to

confirm tha t this would not negatively impact

my retirement benefits. I was advised that

as long as I was enrolled in the ÐCityÑ

pension plan, I would be fine. The FRS

employee also added that he heard other Ðnew

chiefsÑ were doing an Ðindependent contractÑ

with th e City for a one year period, but he

assured me either way would be fine. I

concluded my telephone conversation and

proceeded forward.

I then began the employee benefits

negotiations process with Mr. LaVenia. At

the time of the negotiations, I realized I

would be receiving my Florida Retirement

check on a monthly basis and my wife was also

employed as the vice - president of the Orlando

Union Rescue Mission in Orlando, Florida.

Therefore money was not my primary concern

for this position and I surrendered my much

larger salary with the Orange County

SheriffÓs Office to become the Chief of

Police for Fruitland Park for $70,000 per

year.

I officially accepted the position with the

City of Fruitland Park, and informed

Mr. LaVenia that I could not particip ate in

the Florida Retirement System; however

according to the FRS Hotline employee I could

be placed in the city pension plan or sign a

contract for a one year period. Mr. LaVenia

recommended that I be placed in the city

pension plan and had the appropri ate

paperwork completed.

* * *

It is important to recognize that I felt I

took all the necessary steps to act within

the guidelines of the Florida Retirement

System. After all, I had worked for over

thirty years with the Orange County SheriffÓs

Office with an impeccable record and with the

intent of securing a retirement package that

would protect my wife and family for life.

In conclusion, I feel I have been let down by

the system in two very key areas regarding

this matter:

1. In July 2015, not on ly was I preparing

for retirement and a new job; but my wife was

experiencing serious medical issues that

required surgery and radiation treatments for

months at Shands Hospital. Although my mind

was focused on her condition, I still felt it

was extremely important to contact the FRS

Hotline regarding my potential new position.

My desire was to make sure I did not do

anything that would jeopardize the retirement

plan I worked for my entire career. The

advice I was given by the FRS Hotline

employee/profes sional apparently was

terrible. Not only did he indicate I could

go under the ÐCityÑ pension plan, he further

recommended that other chiefs have dec i ded to

do a ÐcontractÑ with the city for a one year

period to account for the separation from the

FRS syst em. Clearly had this employee

indicated by any means that the position with

Fruitland Park would or possibly could

jeopardize my retirement, I would have run

away from this opportunity . . .

* * *

2. In July and August of 2015, while I was

completing t he hiring process with the City

of Fruitland Park, management and/or staff

should have cautioned me about the potential

risk to my Florida Retirement Pension if I

proceeded with the process.

* * *

Clearly, whoever made the decision to proceed

with proc essing me was unaware of two things.

(1) I would be violating the six month

separation rule if I stopped my employment

with the Orange County SheriffÓs Office on

August 1, 2015 and began employment with

Fruitland Park one day later on August 2,

2015. (2) The only pension plan available to

new employees with the City of Fruitland Park

had to be the Florida Retirement System.

* * *

I now understand from going through this

procedure that there [was] an unintended

error in how I officially retired from t he

Orange County SheriffÓs Office and began my

employment with the Fruitland Park Police

Department. It is important to mention that

Sheriff Kevin Beary and Sheriff Jerry Demings

chose me to command their Professional

Standards Division on two separate oc casions

because they knew I was a man of integrity

and would always Ðdo the right thing.Ñ I had

no intent to skirt the system and/or do

anything unethical. I can assure you nobody

raised a red flag over this position prior to

this incident; and I would h ave immediately

stopped my efforts had I been aware of this

rule.

Mr. FewlessÓs Current Situation

3 4 . While working as Fruitland ParkÓs police chief,

Mr. FewlessÓs salary and retirement benefits totaled $12,000.00 a

month.

3 5 . In order to avoid accumu lating more penalties,

Mr. Fewless retired from his police chief position with Fruitland

Park on August 31, 2018.

3 6 . Mr. Fewless has not received any FRS benefits since

Septem ber 1, 2018. There was a three - month period when he was

receiving no money.

3 7 . Mr. Fewless has been employed by the Groveland Police

Department since March 4, 2019.

3 8 . Mr. Fewless describes his current financial situation

as ÐdireÑ and says he and his wife are Ðwiped out.Ñ They may

need to sell their Ðdream house , Ñ and they b orrow ed $30,000.00

from their daughter in order to litigate the instant case.

3 9 . In addition, the contractor who built the FewlessÓs

dream home failed to pay subcontractors for $93,000.00 of work.

40 . While the Department notes that Mr. Fewless stands to

receive a higher monthly benefit, he disputes that he is somehow

in a better position:

No, I am not in a better position. The

$542,000 that will be taken away from me

because of what clearly could have been

handled with one phone call from a

represent ative of FRS Î the difference in pay

between my former retirement salary and my

new retirement salary based on the

recalculations will go from $6,000 to $7,000

a month. That means in order for me to

recoup the $542,000 that the state was

referring to, I w ould have to work 542

months. I donÓt think IÓll live that much

longer, No. 1. And No. 2, that doesnÓt take

into consideration interest and everything

else that was part of that, if that makes

sense.

41 . Mr. Fewless has filed a lawsuit against Fruitla nd Park.

Ultimate Findings of Fact 12/

4 2 . Mr. FewlessÓs testimony about his July 9, 2015, phone

call to the FRS hotline is more credible than Mr. KentÓs.

Mr. FewlessÓs descriptions of that phone call are very

consistent, and the Department has not dir ected the undersigned

to any instances in which an account of that phone call by

Mr. Fewless differed from his testimony or his July 5, 2018,

letter to the Department. 13/ This finding is also based on

Mr. FewlessÓs demeanor during the final hearing.

4 3 . Moreover, Mr. Fewless was not attempting to Ðgame the

system.Ñ Given Mr. FewlessÓs exceptional record of public

service, it is very unlikely that he would knowingly and

intentionally attempt to engage in Ðdouble dippingÑ by violating

the termination req uirement. It is equally unlikely that

Mr. Kent can accurately remember what he told Mr. Fewless during

a single phone call on July 9, 2015. Rather than questioning

Mr. KentÓs veracity, the undersigned is simply questioning his

ability to recall the con tent of a single phone call that appears

to have been unremarkable. 14/

4 4 . It is also difficult to believe that Mr. Fewless would

accept the police chief position with Fruitland Park and build an

expensive Ðdream houseÑ after being told by Mr. Kent that he

would be violating the termination requirement. 15/

4 5 . Mr. FewlessÓs reliance on Mr. KentÓs statement was

entirely reasonable given that the arrangement described by

Mr. La Venia sounded like an imminently plausible exception to the

termination requi rement. Mr. FewlessÓs subsequent actions in

reliance o f that statement were extremely detriment al to himself

and his family.

4 6 . Finally, the circumstances of the instant case are

analogous to other cases in which appellate courts have held that

the enh anced requirements for estopping the government had been

satisfied. In other words, Mr. KentÓs misrepresentation amounted

to more than mere negligence, the DepartmentÓs proposed action

would result in a serious injustice, and the public interest

would not be unduly harmed by Mr. Fewless retaining the

retirement benefits he earned through his public service with

OCSO.

CONCLUSIONS OF LAW

4 7 . DOAH has jurisdiction over the parties and the subject

matter of this proceeding pursuant to sections 120.569

and 1 20.57(1), Florida Statutes.

4 8 . The burden of proof in this proceeding is on the party

asserting the affirmative of an issue. Wilson v. DepÓt of

Admin., Div. of Ret. , 538 So. 2d 139, 141 - 142 (Fla. 4th DCA

1989). Because Mr. Fewless is asserting that th e Department

should be equitably estopped from recovering $541,780.03 of

retirement benefits from him, he must prove his case by a

preponderance of the evidence. § 120.57(1)(j) , Fla. Stat .

4 9 . The three elements of equitable estoppel are: (a) a

repres entation about a material fact that is contrary to a later -

asserted position; (b) reasonable reliance on that

representation; and (c) a change in position detrimental to the

party claiming estoppel. Equitable estoppel will not be applied

against a governm ental entity without extraordinary circumstances

being present. In addition, a governmental entity will not be

estopped for conduct resulting from a mistake of law. Salz v.

DepÓt of Admin., Div. of Ret. , 432 So. 2d 1376, 1378 (Fla. 3d DCA

1983); Warren v . DepÓt of Health , 554 So. 2d 568 , 571 (Fla. 5th

DCA 1989).

50 . With regard to the first element, the undersigned found

Mr. FewlessÓs testimony about his July 9, 2015, phone call to the

FRS hotline to be more credible than Mr. KentÓs. Mr. FewlessÓs

descr iptions about what Mr. Kent told him have been very

consistent, and the Department has not identified an instance in

which Mr. Fewless has materially contradicted himself.

Therefore, Mr. Fewless proved by a preponderance of the evidence

that the Departmen t made a misrepresentation that was contrary to

a later asserted position.

51 . Mr. Fewless was told that he could immediately go to

work as Fruitland ParkÓs police chief without jeopardizing his

retirement benefits. The Department argues that even if

Mr. Fewless accurately described what was relayed to him during

that July 9, 2015, phone call, the misrepresentation was one of

law rather than one of fact. However, appellate decisions have

concluded that analogous misrepresentations were factual in

nature. Therefore, Mr. Fewless prevails on this point.

See Salz , 432 So. 2d at 1378 (holding the appella nt was entitled

to the benefit of equitable estoppel Ð[w]hen Mrs. Salz asked TRA

in 1966 whether she could purchase credit for the eight years she

had taugh t at the Central Institute for the Deaf, [and] TRA

received information that the Central Institute was not a public

school. It nevertheless allowed Mrs. Salz to purchase eight

years of credit. TRSÓs mistaken belief that the Central

Institute for the Deaf was a public school constituted a mistake

of fact, not of law.Ñ); Kuge v. DepÓt of Admin., Div. o f Ret. ,

449 So. 2d 389, 391 (Fla. 3rd DCA 1984)(stating Ð[w]e reject

DORÓs contention that the representations made in this case were

representations of law r ather than fact. Ms. Kuge was informed

in the January 25, 1983 , memo that she had 9.58 years of

creditable state retirement service as of the date of the memo

and would have ten years of creditable state retirement service

as of March 31, 1983, so long as she continued to work at the

rate of pay below that of her current salary. These were

representations of fact, not of law. It is true that such

representations were based on a misunderstanding of the law

applicable to her case, but this does not convert the factual

representations into legal representations. Ms. Kuge was told,

as a matter of fact, how many years of creditable state

retirement service she had, and how many such years she would

have if she continued working through March 31, 1983; she was in

no way advised as to the status of Florida law.Ñ); Harris v.

DepÓt of Admin., Div. of State EmployeesÓ Ins. , 577 So. 2d 1363,

n . 1 (Fla. 1st DCA 1991)(stating that Ð[a]lthough QuincosesÓ

representation was based on a misunderstanding of the applicable

l aw, her statement was nonetheless a factual misrepresentation

regarding what acts were necessary to effectuate conversion to

family coverage.Ñ).

5 2 . The Department also argues that any reliance by

Mr. Fewless on a misrepresentation was unreasonable gi ven the

written warnings on the forms he signed on June 1, 2011, and

July 14, 2015. However, Mr. LaVeniaÓs assertion that Mr. Fewless

could be enrolled into a separate city pension plan without

violating any FRS requirements was a very plausible sounding

exception to the termination requirement. Because Mr. Kent

subsequently corroborated that assertion, Mr. FewlessÓs reliance

was imminently reasonable.

5 3 . The Department additionally argues that: (a) equitable

estoppel does not apply to transactions f orbidden by statute; and

(b) Mr. KentÓs conduct was merely negligent and does not rise to

the level at which the government will be estopped from taking

action. See Fraga v. DepÓt of HRS , 464 So. 2d 144, 146 (Fla. 3d

DCA 1984)(noting Ð[t]he doctrine of eq uitable estoppel is not

applicable in transactions which are forbidden by statute or

which are contrary to public policy.Ñ); Council Bros. v. City of

Tallahassee , 634 So. 2d 264, 266 (Fla. 1st DCA 1994)(explaining

that Ð[o]ne seeking to invoke the doctrine of equitable estoppel

against the government must first establish the usual elements

of estoppel, and then must demonstrate the existence of

affirmative conduct by the government which goes beyond mere

negligence . . . .Ñ

5 4 . The cases cited in paragra ph 51 above indicate that

those two elements of maintaining an equitable estoppel claim

against the government have not persuaded appellate courts to

rule against parties seeking to invoke the doctrine under

analogous circumstances. See Salz , 432 So. 2d a t 1378; Kuge , 449

So. 2d at 391; Harris , 577 So. 2d at 1363 n . 1.

5 5 . Finally, the Department argues that its proposed action

does not amount to a serious injustice. See Council Bros. , 634

So. 2d at 266 (noting that a party seeking to assert equitable

est oppel against the government Ðmust show that the governmental

conduct will cause serious injustice, and must show that the

application of estoppel will not unduly harm the public

interest.Ñ). Mr. Fewless can pursue a legal action against

Fruitland Park.

5 6 . Despite the DepartmentÓs assertions to the contrary,

its proposed action does amount to an exceptional circumstance,

it would result in a serious injustice, and it would unduly harm

the public interest. As described in the Findings of Fact,

Mr. Fe wless has been an exceptional public servant for well over

30 years. He reasonably relied on a statement from an FRS

employee to quit his job with OCSO, take a lower paying position

with Fruitland Park, and to build a dream home. Now, his assets

have bee n depleted, and he faces the prospect of having to repay

$541,780.03 to the Department. This situation clearly amounts to

an exceptional circumstance and amounts to a serious injustice.

While the Department asserts that Mr. Fewless can pursue a legal

act ion against Fruitland Park, the Department itself could have

sought to recover the retirement benefits at issue from Fruitland

Park given that section 121.091(9)(c)3. renders Mr. Fewless and

Fruitland Park jointly and severally liable. Moreover, the

Depar tmentÓs proposed action against an exception al public

servant would unduly harm the public interest. See generally

Hollywood Beach Hotel Co. v. Hollywood , 329 So. 2d 10, 18 (Fla.

1976)(noting that Ð[e]very citizen has the right to expect that

he will be d ealt with fairly by his governmentÑ and that Ð[w]hile

a City Commission certainly possesses the prerogative of deciding

to defer action on such a proposal over a long period of time, it

must assume the attendant responsibility for the adverse effect

it kno ws or should know its deliberate inaction will have upon

the parties with whom it is dealing.Ñ).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Management

Services, Division of Reti rement , enter a final order rescinding

its proposed action that Michael A. FewlessÓs FRS DROP retirement

be voided and that he be required to repay all retirement

benefits as provided in Florida Administrative Code Rule 60S -

4.012.

DONE AND ENTERED this 18 t h day of July, 2019 , in

Tallahassee, Leon County, Florida.

S

G. W. CHISENHALL

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 1 8 th day of July, 2019 .

ENDNOTE S

1/ Unless indicated otherwise, all statutory references will be

to the 2018 version of the Fl orida Statutes.

2/ Kathy Gould, the DepartmentÓs Bureau Chief of Retirement

Calculations, explained that Ð[t]he termination requirement is

that a member has to terminate employment and not have employment

with any participating FRS employer for the first through six

calendar months. In the 7th through 12th, if they are employed,

they would need to suspend their retirement benefit, and in the

12th month they could work for a participating employer and

collect their retirement.

Ms. Gould also explained t hat the termination requirement

used to be one month. The Florida Legislature increased the

termination requirement to six months in order to combat Ðdouble

dipping Ñ :

Q: Do you have any idea why the legislature

made that change?

A: I think some of it stemmed from the fact

that people were retiring and then sitting

out for one month, agencies may be holding

the positions for them because they did a

good job while they were there? Some people

call [] the term double - dipping. So they

were collecting the ir benefits and the n

immediately going back to a job to continue

other benefits.

Q: Is it fair to say that in that

circumstance, they really werenÓt

terminating?

A: Yes, it is fair to say. A lot of them

left their stuff at their desk and just took

a month off.

3/ Ms. Gould explained the connection between continuation of the

FRSÓs qualified plan status and the termination requirement:

Q: Does the IRS Î first of all, is FRS a

qualified plan under the IRS regs?

A: We are a qualified plan under Internal

Revenue Code for 401(a)Ós

Q: And is that for government plans?

A: Yes, it is.

Q: Does that Î and with that qualification,

does that [result in] the tax deferment of

the benefits?

A: It does. So in order to remain

qualified, we must satis fy termination. A

termination must be satisfied. [The]

legislature has determined termination to be

the first through six calendar months. So we

as the administrator of the pension plan are

required to administer it based on [the

requirement that] indiv iduals under our plan

must satisfy the first through six calendar

month termination for us to keep our

qualified status.

Q: Okay. Now, does the IRS require a bona

fide termination?

A: Yes, they do.

4/ Mr. FewlessÓs attorney asked him to describe his first

assignment with OCSO:

A: I was assigned to the worst area in

Orange County actually. It was Sector 4,

itÓs the Orange Blossom Trail area. They

probably have the most shootings, the most

homicides, the most robberies, the most

sexual batterie s. ItÓs just a violent area

of Orange County.

Q: Was that like your first choice or your

preference, or did you Î were you hoping to

transfer out of there as quickly as possible?

A: I loved the area.

Q: Can you explain why?

A: Because itÓs Î you g et into law

enforcement because you want to be busy, you

want to be active, and you want to make an

impact on peopleÓs lives, and who better to

make an impact on than the people that are

actually being victimized by crimes?

5/ With regard to that promo tion, the following exchange occurred

between Mr. Fewless and his attorney:

Q: When you were promoted out as a corporal,

do you mean like you were promoted out of

criminal investigations?

A: Yeah, the sheriffs are pretty consistent

with that, that when you get promoted, they

like you to go back to the road and serve a

little bit of time on the road before you go

into another specialized unit.

Q: Did you Î were you averse to going back

out on the road?

A: Not at all.

Q: That was like what you enjoy ed?

A: It was, and I got to go back to Sector 4,

so it was even better.

Q: Was that by choice or just the way it

worked out?

A: They had openings, so it was kind of by

choice because I was able to choose which one

I wanted to go to.

6/ The follo wing questioning took place about Mr. Fewless Ós

assignment to gang enforcement :

Q: And IÓm sure it sounds intuitive to some,

but what kind of stuff were you doing in the

Gang Enforcement Unit?

A: Gang enforcement, I mean, obviously weÓre

doing a lot of intelligence on the

individuals, weÓre Î weÓre identifying who []

gang members are, weÓre looking where the

graffiti is showing up, weÓre interpreting

the graffiti, weÓre trying to make sure we

have no turf wars and stuff like that. WeÓre

actually just f ocused on that particular

segment.

Q: During that time period, did Orlando have

[] pretty excessive or substantial gang turf

wars and population, so to speak?

A: It did, and, actually, back when I was a

corporal in there Î IÓm sure most of yÓall

have h eard of Sur 13 recently. The president

talks about it quite a bit. That was in the

infancy stages back then. We had quite a

little group in Orange County that was

claiming Sur 13 back then.

Q: You say Sur 13. Is that MS 13?

A: Yes, same thing.

7/ The following exchange pertained to Mr. Fewless Ós tenure in

charge of the gang enforcement unit:

Q: During this time period when you were

sergeant in the Gang Enforcement Unit, were

there any programs you implemented as a

sergeant for gang enforcement a nd juvenile

offenders?

* * *

A: The sheriff has Î he received [a]

$234,000 grant from the Department of

Juvenile Justice for our agency to do some

type of program with them. The sheriff heard

of a program in Boston. It was called either

Lights Out or Nights Out. It dealt with the

agency removing firearms from gang members.

So the sheriff sent me up to Boston to look

at their program, kind of review it and see

if it would work in our area. I looked at

the program. It was not going to work in our

are a. So I came back and told the sheriff, I

says, ÐNo, I donÓt like the program. ItÓs

not for us.Ñ But I asked him for permission

to begin a unit dealing with the worst of the

worst juveniles that were on probation,

figuring that if we could make a differ ence

with them, we may be able to turn some of

them from the criminal behavior and actually

get them on the right path. So we started

the unit called the Juvenile Arresting

Monitor Unit. ItÓs known as the JAM Unit.

Q: And was that Î for that unit, can Î was

the unit successful, the plan you implemented

Î or helped implement, I should say?

A: Yeah, it was actually only supposed to be

a six - month program, but we were having so

much success with it, the sheriff continued

it on. After the first year, the se worst of

the worst juvenile violators Î IÓm talking

the ones that have done your home invasions,

your car jackings, your robberies, your sex

offenses, heavy narcotics dealing, aggravated

batteries, these are violent individuals Î we

had an 87 percent su ccess rate for them not

committing any violations of their probations

and/or being re Î reoffending with any

criminal offenses.

Q: And that programÓs still in effect today,

best of your knowledge?

A: It is in effect today and the program was

actually r ecognized nationally. We won the

Herman Goldstein Award, which is a program in

the problem - oriented police area, and they

flew me out to San Diego to speak at their

national conference regarding the program.

8/ The following testimony pertained to Mr. FewlessÓs tenure in

charge of the Fusion Center and the criminal intelligence

section :

Q: Would it be fair to say your Î the next

and last job you held with OCSO was your

favorite?

A: Absolutely.

Q: And what was that?

A: That was being the directo r over the

fusion center and the captain over the

criminal intelligence section. I donÓt

know Î are you familiar with the fusion

center?

ALJ: No.

A: Let me briefly explain that to you.

The fusion centers were created by President

George W. Bush af ter the 9/11 attacks, and it

was his opinion that the federal government

and local government were not sharing

intelligence well enough, and he wanted to

put a local agency in charge of a bunch of

federal areas to where we could share

intelligence more dea ling with domestic and

international terrorism.

The particular job, it was amazing some of

the things that you just know about whatÓs

going on around [the] country. You had

people that were actually dealing with

Taliban and stuff like that. It was Î tha t

were working out of my office. And the most

impressive thing about that unit Î well,

first, our fusion center was not as big as

most of them around the United States, and in

2014 we were nominated for Fusion Center of

the Year, we finished No. 2, so we still won

an award. But nine times a criminal

intelligence bulletin went from my desk to

the presidential briefing, right from my desk

to his desk. That normally doesnÓt happen.

Usually intelligence briefings are either

given to the President through th e CIA, the

Department of Homeland Security, or the FBI.

So it was pretty impressive, some of the work

that was being done out of that building.

9/ Mr. Fewless testified that Ð[w]hoever I spoke to clearly gave

me those options of city pension plan, thi rd - party contract, but

make sure you stay out of the FRS system.Ñ In contrast, Mr. Kent

testified that he told Mr. Fewless that Ðall new hires to an FRS

employer would be compulsory FRS members and that he had to

fulfill the definition of ÒterminationÓ in order to make sure

that his retirement was safe.Ñ Mr. Kent also testified that he

told Mr. Fewless that he would be violating FRS requirements by

immediately going to work for Fruitland Park. For reasons

addressed in the ultimate findings of fact, the u ndersigned finds

Mr. FewlessÓs testimony more credible.

10/ When questioned during the final hearing about whether he had

read this and other warnings about the consequences of violating

the termination requirement, Mr. Fewless testified as follows:

Ð Mr. Wright, I think IÓve answered this so

many times throughout my depositions and here

in the court, that when I was processing out

of the County of Orange, itÓs kind of like

youÓre going through a sale of a home and you

have people that are describing th ose forms

to you. I [didnÓt] sit there and rea d each

and every form. I take what they say a s

accurate because thatÓs their job, they know

whatÓs on those forms. So when they tell me

I cannot be reenrolled in the FRS system, I

take that [to] heart. Thir ty and a half

years with Orange County, [they had] never

given me bad advice.Ñ

ÐWhen I went over to the City of Fruitland

Park and the city manager said Î I told him I

could not enter the FRS system, he said, Ò No

worries. Ó He says, ÒWeÓve got a separate

city pension plan.Ó I took that [to] heart

that I could enter that plan.Ñ

ÐI then reached out for further confirmation

to the Florida Retirement System hotline and

I spoke to an employee on that hotline. I

said that I was in DROP, leaving the Orange

Cou nty SheriffÓs Office, IÓm thinking of

taking a chief of police position with the

City of Fruitland Park, they have a separate

city pension plan that they said they can put

me in. Will that violate my retirement? The

answer to that question was, ÒNo, as l ong as

youÓre placed in the city pension plan,

youÓre okay. Or what other chief of police

are doing theyÓre entering a third - party

contract with Î with whatever vendors those

are.Ó He said, ÒJust make sure youÓre not

reenrolled in the FRS system.ÓÑ

1 1/ A Department witness explained the consequences of

retroactively reestablishing Mr. FewlessÓs FRS membership:

What happens when a member violates

termination is effectively we deem them not

retired. So in this instance, with him being

a participant i n the DROP program, when he

left DROP will be back Î added back to his

initial years of service, his benefit will be

recalculated. In this case, the agency

neglected to report him as well, so they will

need to report that time period from August

2015 unti l he terminated employment in order

to insure that he [will] get full service

credit for now his entire period. He will

repay benefits received, such as the DROP and

any monthly pension benefits.

Another [consequence] is the agency

[Fruitland Park] is going to be responsible

for any additional contributions due for the

period they did not report him when he was in

a compulsory position, as well as the

contributions during the DROP period. He was

reported at the DP, which is the DROP

contributions rate, which is less than the

special risk class rate associated with his

position. So theyÓre also responsible for

those monies.

12/ In the Joint Pre - h earing Stipulation, Mr. Fewless identified

the following as the factual issues remaining to be litigated:

(a) whether Mr. Fewless went to work for Fruitland Park knowing

that doing so would violate the termination requirement;

(b) whether Mr. Fewless knew he would lose his retirement

benefits by going to work for Fruitland Park; (c) whether

Mr. Fewless acte d in good faith by calling FRS and by inquiring

as to whether he could work for Fruitland Park without violating

the termination requirement; and (d) whether equitable estoppel

applies to the instant case. The Department identified the

factual issues as f ollows: (a) whether Mr. Fewless satisfied the

termination requirement set forth in section 121.021(39), Florida

Statutes; and (b) whether Mr. Fewless must return the retirement

benefits he received.

There was no argument by Mr. Fewless that he had satis fied

the termination requirement or that the Department was

misconstruing the statutes and/or rules governing the DROP

program. In short, Mr. FewlessÓs case was limited to arguing

that the Department should be estopped from requiring him to

return the ret irement benefits at issue.

13/ The deposition of a former Fruitland Park city commissioner

indicates that Mr. Fewless relayed the same account of what he

was told by Mr. LaVenia and Mr. Kent during a city commission

meeting.

14/ The DepartmentÓs witn esses were not entirely consistent as to

the circumstances under which someone would be in violation of

the termination requirement. Therefore, it is possible that

Mr. Kent expressed an opinion to Mr. Fewless that turned out to

not be shared by his super iors.

15/ There was extensive argument at the final hearing about

the fact that the Department had not preserved a recording of

Mr. FewlessÓs phone call with Mr. Kent. Because the undersigned

has credited Mr. FewlessÓs version of that phone call, th ere is

no need to consider whether a negative inference should be drawn

against the Department.

COPIES FURNISHED:

Thomas E. Wright, Esquire

Office of the General Counsel

Department of Management Services

Suite 160

4050 Esplanade Way

Tallahassee, Florida 32399

(eServed)

Brian O. Finnerty, Esquire

The Law Offices of Steven R. Andrews, P.A.

822 North Monroe Street

Tallahassee, Florida 32303

(eServed)

Ryan Joshua Andrews, Esquire

The Law Offices of Steven R. Andrews, P.A.

822 North Monroe Street

Tallahas see, Florida 32303

(eServed)

Sean W. Gellis, Esquire

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399

(eServed)

Johana E. Nieves, Esquire

Law Offices of Steven R. Andrews, P.A.

822 North Monroe Street

Tallahassee, Florida 32303

(eServed)

David DiSalvo , D irector

Division of Retirement

Department of Management Services

Post Office Box 9000

Tallahassee, Florida 32315 - 9000

(eServed)

Chasity OÓ Steen, General Cou nsel

Office of the General Counsel

Department of Management Ser vices

Suite 160

4050 Esplanade Way

Tallahassee, Florida 323 99 - 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 R ecommended Order should be filed with the agency that

will issue the Final Order in this case.