19-004145 Rina Richard Demichael vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Tuesday, April 14, 2020.

Summary: Petitioner, a surviving spouse, cannot change her deceased husband's Option 1 retirement benefit selection once payments were cashed or deposited. Evidence failed to establish husband's mental incapacity or duress.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

R INA R ICHARD D EMICHAEL ,

Petitioner ,

vs. Cas e No. 19 - 4145

D EPARTMENT OF M ANAGEMENT S ERVICES ,

D IVISION OF R ETIREMENT ,

Respondent .

/

R ECOMMENDED O RDER

This matter came before Administrative Law Judge Darren A. Schwartz

of the Division of Administrative Hearings ( Ñ DOAH Ò ) for final hearing on

January 21, 2020, by video teleconference with sites in Tallahassee and

Miami, Florida.

A PPEARANCES

For Petitioner: James C. Casey, Esquire

Law Offices of Slesnick and Casey, LLP

2701 Ponce de Leon Boulevard, Suite 200

Coral Gables, Florida 33134

For Respondent: Ladasiah Jackson Ford, Esquire

Nikita S. Pa rker, Esquire

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

S TATEMENT OF T HE I SSUE

Whether Petitioner, Rina Richard DeMichael ( Ñ Petitioner Ò ), the surviving

spouse of David DeMichael, is entitled to change the Florida Retirement

System ( Ñ FRS Ò ) retirement benefits payment Option 1 selected by

Mr. DeMichael .

P RELIMINARY S TATEMENT

On April 23, 2019, Respondent, Department of Management Services,

Division of Retirement ( Ñ Respondent Ò ) issued a final agency action letter to

Petitioner, informing Petitioner that her request that Respondent pay her

FRS benefits from Mr. DeMichaelÔs retirement account was denied.

Dissatisfied with RespondentÔs decision, Petitioner timely filed a Petition for

Admini strative Hearing. On June 19, 2019, Respondent set an informal

administrative hearing. On August 5, 2019, Respondent determined that

disputed issues of material fact exist, and referred th e matter to DOAH to

assign an administrative law judge to conduct a formal hearing.

On August 13, 2019, the undersigned set the final hearing for October 28,

2019. On October 14, 2019, Respondent filed an unopposed motion to

continue the final hearing. On October 16, 2019, the undersigned entered an

Order granting the mot ion and reset the final hearing for January 21, 2020.

On January 13, 2020, the parties filed their Joint Pre - hearing Stipulation, in

which they stipulated to certain facts.

The final hearing was held on January 21, 2020. Petitioner testified on

her own be half. PetitionerÔs Exhibits 1 through 7 were received into evidence.

Respondent presented the testimony of David Heidel, benefits administrator

for Respondent. RespondentÔs Exhibits 1 through 16 were received into

evidence.

The one - volume final hearing Tr anscrip t was filed at DOAH on

February 14, 2020. On February 19, 2020, Respondent filed an unopposed

motion for extension of time for the parties to file their proposed

recommended orders. On February 20, 2020, the undersigned entered an

Order granting the motion, extending the deadline to March 13, 2020. On

March 11, 2020, Petitioner filed an unopposed motion for another extension

of time for the parties to file their proposed recommended orders. On

March 11, 2020, the undersigned entered an Order granting the motion,

extending the deadline to March 20, 2020. The parties timely filed proposed

recommended orders, which were given consideration in the preparation of

this Recommended Order.

The stipulated facts in the partiesÔ Pre - hearing Stipulation have be en

incorporated herein as indicated below. All references to the Florida Statutes

are to the 2015 version, unless otherwise indicated.

F INDINGS OF F ACT

1. Respondent is the state agency charged under chapter 121, Florida

Statutes, with administering the F RS.

2. In 1991, Mr. DeMichael began employment with the Broward County

SheriffÔs Office ( Ñ BCSO Ò ). Mr. DeMichael was a member of the FRS pension

plan based on his employment with the BCSO as a deputy sheriff.

3 . Mr. DeMichael married Petitioner on November 19, 2011.

4. On February 11, 2013, Mr. DeMichael retired from the BCSO. At that

time, he signed the Florida Retirement System Pension Plan Application for

Service Retirement form ( Ñ Application for Service Retirement Form Ò )

designating Petitioner as his pr imary beneficiary.

5. On February 11, 2013, Mr. DeMichael also signed the Florida

Retirement System Pension Plan Option Selection for FRS Members form

(Form FRS - 110)( Ñ Option Selection Form Ò ). On the Option Selection Form,

Mr. DeMichael was required to sel ect one of four retirement benefit payment

options. The Option Selection Form provided an explanation for each of the

four options. Mr. DeMichael selected to receive an Option 1 retirement

benefit by checking the line next to the Option 1 benefit payment o ption.

Option 1 provides the maximum benefit for the life of the FRS member with

no continuing benefit after the memberÔs death.

6. On February 11, 2013, Petitioner signed the Spousal Acknowledgement

Form (Form SA - 1)( Ñ Spousal Acknowledgement Form Ò ) acknow ledging that

Mr. DeMichael Ñ selected either Option 1 or 2. Ò The purpose of the Spousal

Acknowledgement Form is to inform the spouse that he/she will not receiv e a

lifetime benefit following the FRS memberÔs death. The Spousal

Acknowledgement Form does not give a spouse control over which option the

FRS member selects. That option selection decision is the sole choice of the

member. The Spousal Acknowledgement Form provided an explanation of the

four different retirement payment options available to FRS memb ers . At the

hearing, Petitioner acknowledged she signed the Spousal Acknowledgement

Form.

7. Ms. Tiffany Pieters was a duly licensed notary with the State of Florida

and an employee of BCSO on February 11, 2013. Ms. Pieters notarized the

Application for S ervice Retirement Form and Option Selection Form signed

by Mr. DeMichael, and the Spousal Acknowledgement Form signed by

Petitioner.

8. The Division received Mr. DeMichaelÔs Application for Service

Retirement Form, Option Selection Form, and PetitionerÔs Spousal

Acknowledgement Form on or about February 11, 2013.

9. On February 20, 2013, Respondent mailed Mr. DeMichael an

Acknowledgement of Service Retirement Application letter acknowledging

RespondentÔs receipt of Mr. DeMichaelÔs Application for Service R etirement

Form; his selection of Option 1 as the benefit payment option; his

employment termination date of February 11, 2013; and retirement date of

March 1, 2013. The Acknowledgement of Service Retirement Application

letter expressly provides that Mr. De Michael cannot change the option he

selected once his retirement becomes final, and that retirement benefits

become final when any payment is cashed or deposited.

10. Mr. DeMichaelÔs Application for Service Retirement Form and Option

Selection Form also ex pressly provide that he cannot change the option he

selected once his retirement becomes final, and that retirement benefits

become final when any benefit payment is cashed or deposited. On

February 20, 2013, Respondent also mailed Mr. DeMichael an Estimat e of

Retirement Benefit letter , which provides an estimate of the payment benefit

for each of the four options . The letter also acknowledges that Mr. DeMichael

selected Option 1 , and that his option selection cannot be changed after any

payment is cashed o r deposited.

11. On April 1, 2013, Respondent mailed a request for birth date

verification to Mr. DeMichael. In response, on April 30, 2013, Respondent

received Mr. DeMichaelÔs birth certificate.

12. Based on his selection of Option 1, Mr. DeMichael receiv ed an initial

retroactive payment of $7,809.76 on May 10, 2013; an initial regular

retirement payment of $3,904.88 on May 31, 2013; and a subsequent

retirement payment every month in 2013 in the monthly amount of

$3,904.88.

13. Mr. DeMichael received a re tirement payment every month beginning

May 2013 until he died on August 25, 2015. Mr. DeMichael received a total of

29 retirement payments for a total gross benefit amount of $119,832.92. Each

retirement payment was cashed or deposited into Mr. DeMichaelÔs bank

account.

1 4 . Respondent was notified of Mr. DeMichaelÔs death in August 2015.

1 5 . On or about October 6, 2015, Respondent notified Petitioner that

Mr. DeMichaelÔs benefit had ended and that there would be no continuing

benefit to her based on Mr. De MichaelÔs Option 1 selection.

1 6 . In this proceeding, Petitioner claims she is entitled to change

Mr. DeMichaelÔs Option 1 retirement benefit selection and receive a

continu ing monthly spousal benefit. In support of her position, Petitioner

contends Mr. D eMichaelÔs selection of Option 1 is invalid because he lacked

the mental capacity to make a retirement option at the time his Application

for Service Retirement Form and Option Selection Form was submitted to

Respondent. Based on the persuasive and credibl e evidence adduced at

hearing, Petitioner failed to establish that Mr. DeMichael lacked the mental

capacity to make a retirement option at the time his Application for Service

Retirement Form and Option Selection Form w ere submitted to Respondent.

1 7 . No medical evidence was presented establishing that Mr. DeMichael

was mentally incapacitated at the time he executed the Application for

Service Retirement Form and Option Selection Form on February 11, 2013.

1 8 . In fact, Mr. DeMichael was released from Sun rise Detoxification

Cent e r on February 11, 2013, following in - patient rehabilitative treatment

for his alcoholism. PetitionerÔs Exhibit 7 expressly states that Mr. DeMichael

Ñ was medically stable for discharge Ò at 8:00 a.m. that morning.

19 . Moreover, Pet itioner and Mr. DeMichael ate breakfast together later

that morning at the BCSO cafeteria. Subsequently, Petitioner was escorted to

the BCSO Internal Affairs area where she was questioned about Mr.

DeMichaelÔs alcoholism. After Petitioner refused to answer any questions, she

was escorted to the BCSO rooftop terrace.

2 0 . After a while, Mr. DeMichael came to the rooftop terrace. According to

Petitioner, Mr. DeMichael was smiling and they exchanged pleasantries.

2 1 . After February 11, 2013, Mr. DeMichael c ontinued to manage his own

financial affairs, including his bank account.

2 2 . On April 1, 2013, Respondent sent a request to Mr. DeMichael to

provide verification regarding his date of birth. In response, Mr. DeMichael

sent his birth certificate to Respon dent.

2 3 . Finally, at no time did Petitioner ever seek a guardianship or power of

attorney over Mr. DeMichael , and at no time was Mr. DeMichael adjudicated

incompetent by a court .

2 4 . Petitioner also claims that Mr. DeMichaelÔs selection of Option 1 is

i nvalid and that she is entitled to a continuing benefit because she lacked the

opportunity to read the Spousal Acknowledgement Form before signing it.

Based on the persuasive and credible evidence adduced at hearing, Petitioner

failed to establish that she lacked the opportunity to read the Spousal

Acknowledgement Form before signing it.

2 5 . In support of her position, Petitioner testified at one point in the

hearing that she only saw the area of the form near where she signed it.

However, in the area of t he form near where Petitioner signed (RespondentÔs

Exhibit No. 6) is the express Ñ acknowledgement that the member has selected

either Option 1 or 2. Ò

2 6 . At another point in the hearing, Petitioner testified she saw the small

writing below her signature a t the bottom of the Spousal Acknowledgement

Form, but she did not read any of the writing. The small writing below

PetitionerÔs signature at the bottom of the form provides an explanation of

the four retirement benefit payment options.

2 7 . Notably, Petitio ner did not testify that she asked Ms. Pieters for any

explanation of the Spousal Acknowledgement Form. Further, Petitioner did

not testify that she needed or asked for more time to read the Spousal

Acknowledgement Form before signing it, or that Ms. Piete rs refused to allow

her to read the form. Petitioner could have asked Ms. Pieters for more time to

read the Spousal Acknowledgement Form if she felt it was necessary, but she

did not.

2 8 . At no time did Petitioner ever file a complaint against Ms. Pieters or

complain about her handling of the Spousal Acknowledgement Form.

29 . Had Petitioner been concerned about the Spousal Acknowledgement

form or Mr. DeMichaelÔs mental capacity on February 11, 2013, she also could

have spoken to Judy Cowell, Mr. DeMichaelÔ s supervisor at BCSO. Ms.

Cowell greeted Petitioner and Mr. DeMichael at the front office when they

arrived at BCSO on the morning of February 11, 2013, and Ms. Cowell

escorted them to the cafeteria and rooftop terrace. At hearing, Petitioner

testified tha t Ms. Cowell Ñ was like a mom, Ò and that she had spoken to her on

numerous occasions when Mr. DeMichael had problems with his employment.

3 0 . At hearing, the undersigned had the distinct opportunity to observe

PetitionerÔs testimony and her demeanor. Peti tionerÔs testimony regarding

Mr. DeMichaelÔs alleged mental in capacity on February 11, 2013, and her not

having the opportunity to read the Spousal Acknowledgement Form and the

alleged invalidity of the Spousal Acknowledgement Form, Option Selection

Form, and Application for Service Retirement Form, is not credited and is

rejected as unpersuasive.

3 1 . In sum, Petitioner is not entitled to change Mr. DeMichaelÔs selection

of Option 1 as his FRS retirement benefits payment option and sh e is not

entitled to a continuing benefit.

C ONCLUSIONS OF L AW

3 2 . DOAH has personal and subject matter jurisdiction in this proceeding

pursuant to sections 120.569 and 120.57, Florida Statutes.

3 3 . As the party seeking the affirmative of the issue, Petitioner has the

burden of proving by a preponderance of the evidence that she is entitled to

change Mr. DeMichaelÔs Option 1 benefit payment s election and receive a

continuing benefit. Wilson v. DepÔt of Admin. Div. of Ret. , 538 So. 2d 139, 141 -

142 (Fla. 4th DCA 1989).

3 4 . The rights of FRS members are contractual in nature between the

member and the State of Florida. Such contractual rights are legally

enforceable as valid contract rights and cannot be abridged in any way.

§ 121.011(3)(d), Fla. Stat. A party to a contract is co nclusively presumed to

know and understand the contents, terms, and conditions of a contract before

signing it, and any inquiries concerning the ramifications of the contract

should be made before signing it. Semerena v. Dist. Bd. of Trus. of Miami

Dade Co llege , 282 So. 3d 974, 977 (Fla. 3d DCA 2019).

3 5 . With these legal principles in mind, t he four retirement benefit

payment options available to FRS employees are explained in

section 121.091(6)(a):

(6) OPTIONAL FORMS OF RETIREMENT

BENEFITS AND DISABILITY RETIREMENT

BENEFITS. Ð

(a) Prior to the receipt 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 acco rdance with

one of the following options:

1. The maximum retirement benefit payable to

the member during his or her lifetime.

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 which, after the death of either,

shall continue during the lifetime of the survivor in

the same amount, subject to the provisions of

sub section (12).

4. A decreased retirement benefit payable during

the joint lifetime of the member and his or her joint

annuitant and which, after the death of either,

shall continue during the lifetime of the survivor in

an amount equal to 66 2/3 percent of the amount

that was payable during the joint lifetime of the

member and his or her joint annuitant, subject to

the provisions of subsection (12).

The spouse of any member who elects to receive the

benefit provided under subparagraph 1. or

subparagraph 2. shall be notifie d of and shall

acknowledge any such election. The division shall

establish by rule a method for selecting the

appropriate actuarial factor for optional forms of

benefits selected under subparagraphs 3. and 4.,

based on the age of the member and the joint

a nnuitant.

36. Section 121.091(6)(h) further provides , in pertinent part: Ñ T he option

selected or determined for payment of benefits as provided in this section

shall be final and irrevocable at the time a benefit payment is cashed or

deposited. Ò

37. As de tailed above, it is undisputed tha t Mr. DeMichael selected

Option 1 and signed the Option Selection Form and Application for Service

Retirement Form, and that Petitioner signed the Spousal Acknowledgement

Form acknowledging that Mr. DeMichael had selected either Option 1 or

Option 2. In addition, the Spousal Acknowledgement Form explained the four

options. Petitioner received 29 Option 1 retirement benefit payments prior to

his death, totaling $119,832.92. Each retirement payment was cashed or

deposited int o Mr. DeMichaelÔs bank account. Pursuant to the plain language

of section 121.091(6)(h), Mr. DeMichaelÔs sele ction of Option 1 on the

Option Selection Form cannot be changed.

38. Moreover, as detailed above, Petitioner failed to prove by a

preponderance o f the evidence that Mr. DeMichael lacked the mental

capacity to make a retirement option at the time his Application for Service

Retirement Form and Option Selection Form was submitted to Respondent.

Petitioner also failed to prove by a preponderance of th e evidence that she

lacked the opportunity to read the Spousal Acknowledgement Form before

signing it.

39. In numerous similar cases, administrative law judges have rejected

the claim that an FRS memberÔs retirement selection option can be

posthumously ch anged based on allegations of mental incapacity or duress .

See Williams v. DepÔt of Mgt. Servs ., Div. of Ret. , Case No. 19 - 5499 (Fla.

DOAH Mar. 4, 2020); Maddox v. DepÔt of Mgt. Servs ., Div. of Ret. , Case

No. 17 - 1424 (Fla. DOAH Aug. 25, 2017; Fla. DMS Jan. 5, 2018); Jones v.

DepÔt of Mgt. Servs. , Div. of Ret. , Case No. 16 - 0429 (Fla. DOAH Oct. 25, 2016 ;

Fla. DOAH Jan. 3, 2018); Renaud v. DepÔt of Mgt. Servs., Div. of Ret. , Case

No. 15 - 1528 (Fla. DOAH June 24, 2015); Radicella v. DepÔt of Mgt. Servs.,

Div. of Ret. , Case No. 11 - 5491 (Fla. DOAH Feb. 27, 2012; Fla. DMS Mar. 15,

2012); Carpenter v. DepÔt Mgt. Servs., Div. of Ret., Case No. 01 - 1618 (Fla.

DOAH July 12, 2001 ; Fla. DOAH Aug. 22, 2001); Holland v. Div. of Ret. , Case

No. 98 - 3886 (Fla. DOAH June 29, 1999 ; Fla. Div. of Ret. September 9, 1999);

Reeber v. DepÔt of Admin., Div. of Ret. , Case No. 92 - 0215 (Fla. DOAH May 29,

1992; Fla. DOA July 21, 1992). Nothing about this case distinguishes it from

those cited above. The undersigned heard no evidence or testim ony to

persuade him to deviate from the plain language of the applicable statutes.

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

R ECOMMENDED that the Department of Management Services, Division of

Retirement , enter a final order denying PetitionerÔs request to change the

Florida Retirement System retirement benefits payment Option 1 selected by

Mr. DeMichael and receive a continu ing monthly spousal benefit.

D ONE A ND E NTERED this 14th day of April , 2020 , in Tallahassee, Leon

County, Florida.

S

D ARREN A. S CHWARTZ

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.f l.us

Filed with the Clerk of the

Division of Administrative Hearings

this 14th day of April , 2020 .

C OPIES F URNISHED :

James C. Casey, Esquire

Law Offices of Slesnick and Casey, LLP

2701 Ponce de Leon Boulevard , Suite 200

Coral Gables, Florida 33134

(eS erved)

Ladasiah Jackson Ford, Esquire

Department of Management Services

4050 Esplanade Way , Suite 160

Tallahassee, Florida 32399 - 0950

(eServed)

Nikita S. Parker, Esquire

Department of Management Services

4050 Esplanade Way , Suite 160

Tallahassee, Florid a 32399 - 0950

(eServed)

David DiSalvo, Director

Division of Retirement

D epartment of M anagement S ervices

Post Office Box 9000

Tallahassee, Florida 32315 - 9000

(eServed)

Sean Gellis, General Counsel

Office of the General Cou ns el

Department of Management Services

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 - 0950

(eServed)

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

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.