91-002306 Alree Portee vs. Division Of Retirement Status: Closed Recommended Order on Monday, July 22, 1991.

Summary: Selection of benefits option by a retiree who dies after retirement and before receipt of 1st benefit payment; surviving son entitled to most favored option

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ALREE PORTEE, )

)

Petitioner, )

)

vs. ) CASE NO. 91-2306

)

DEPARTMENT OF ADMINISTRATION )

DIVISION OF RETIREMENT, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted before Daniel Manry, a

duly designated Hearing Officer of the Division of Administrative Hearings, on

June 18, 1991, in Miami, Florida.

APPEARANCES

For Petitioner: J. Jerry Zeltzer, Esquire

Attorney at Law

420 Lincoln Road, Suite 238

Miami, Florida 33139

For Respondent: Stanley M. Danek, Esquire

Division Attorney

Division of Retirement

Cedars Executive Center

2639 North Monroe Street, Building C

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue for determination in this proceeding is whether Petitioner is

entitled to receive benefits under the retirement plan of his deceased mother,

Violet Portee, pursuant to the Florida Retirement System, Chapter 121, Florida

Statutes. 1/

PRELIMINARY STATEMENT

Petitioner served Respondent with a Petition for Administrative Hearing on

April 2, 1991. Respondent referred the matter to the Division of Administrative

Hearings on April 15, 1991, for assignment of a hearing officer. The matter was

assigned to the undersigned on April 19, 1991. A formal hearing was scheduled

for June 18, 1991, pursuant to a Notice of Hearing issued on May 3, 1991.

At the formal hearing, Petitioner testified in his own behalf and presented

the testimony of one other witness. Petitioner also submitted five exhibits for

admission in evidence. Petitioner's Exhibits 1 and 3-5 were admitted in

evidence without objection. Petitioner's Exhibit 2 was not admitted in

evidence. 2/ Respondent presented the testimony of one witness and submitted

one composite exhibit which was admitted in evidence without objection. 3/

A transcript of the record of the formal hearing was not requested by

either party. Proposed findings of fact and conclusions of law were timely

filed by the parties on July 1, 1991. The parties' proposed findings of fact

are addressed in the Appendix to this Order.

FINDINGS OF FACT

1. Violet Portee was employed by Jackson Memorial Hospital ("Jackson") in

Dade County, Florida, as a ward clerk from 1970 through October 3, 1990. Mrs.

Portee retired from her employment at Jackson effective December 1, 1990. 4/

Mrs. Portee was a member of the Florida Retirement System. Petitioner is the

son of Mrs. Portee and Mrs. Portee's closest surviving relative.

2. Mrs. Portee was diagnosed with terminal, gastric cancer sometime in

August, 1990. Petitioner first learned of his mother's condition from the

attending physician when Petitioner visited his mother in the hospital.

3. Mrs. Portee was admitted to the hospital for approximately one week on

three separate occasions between August, 1990, and December, 1990. She began

taking medications for pain in November, 1990. Her pain medication included

Percodan, Tylenol 3 with codeine, Demerol, and morphine. Mrs. Portee went on

sick and annual leave, and eventually went on leave without pay. Mrs. Portee

executed a power of attorney in favor of her son on October 25, 1990.

4. On November 14, 1990, Mrs. Portee met for approximately an hour and a

half with Luis Gonzalez, a compensation specialist in the Jackson Human

Resources Division. One of Mr. Gonzalez's primary functions is counseling

employees on retirement matters. Mrs. Portee completed a request for estimate

of her retirement benefits ("FRS Form FR-9") and her application for retirement

("FRS Form FR-11").

5. A retiree may select one of four options for retirement benefits on the

FRS Form FR-11. Mrs. Portee selected Option 1 on her Application For Service

Retirement, Form FR-11. Option 1, Member Benefit Only, provides maximum monthly

benefits for the retiree during his or her lifetime but provides no benefit for

survivors of the retiree. Option 2, Ten Years Certain, provides benefits to the

retiree during the retiree's lifetime and, in the event of the retiree's death

within 10 years of the date of retirement, the same monthly amount is paid to

the retiree's beneficiary for the balance of the 10 year period. The monthly

benefit to the retiree under Option 2 is paid at an actuarial rate that is less

than that paid under Option 1. Options 3 and 4 provide benefits to joint

annuitants. 5/

6. Sometime before November 28 or 29, 1990, Petitioner and Mr. Gonzalez

discussed the retirement status of Mrs. Portee. Petitioner asked Mr. Gonzalez

for instructions on how to change the option selected by Mrs. Portee on her

Application For Service Retirement, Form FR-11, from Option 1 to Option 2. Mr.

Gonzalez explained that Mrs. Portee's selection of options could be changed in

one of two ways. First, Mrs. Portee could come into Mr. Gonzalez's office,

execute a new Form FR-11, and select Option 2. Second, Mrs. Portee could return

the first retirement benefit warrant uncashed to the Division of Retirement and

write on the warrant that she wished to change the benefits option from Option 1

to Option 2.

7. Mrs. Portee was too ill to return to Mr. Gonzalez's office to execute a

new retirement option. Petitioner decided to wait and return the first benefit

warrant uncashed and request a change in the options selected. The first

benefit warrant was dated December 31, 1990, Warrant No. 0580615. Mrs. Portee

died on December 6, 1990, before receiving the first benefit warrant. The first

benefit warrant was neither cashed nor returned to the Division of Retirement

with written instructions to change the selection of benefit from Option 1 to

Option 2.

8. During his conversations with Mr. Gonzalez, Petitioner disclosed

neither the seriousness of Mrs. Portee's medical condition nor that Petitioner

had power of attorney for Mrs. Portee. If Mr. Gonzalez had known either fact,

he would have proceeded more expeditiously to change Mrs. Portee's selection of

Option 1 to Option 2.

9. Petitioner and Mr. Gonzalez next spoke on December 8, 1990. Petitioner

had telephoned Mr. Gonzalez on December 6, 1990, but Mr. Gonzalez was not in.

When Mr. Gonzalez returned Petitioner's telephone call on December 8, 1990,

Petitioner informed Mr. Gonzalez that Mrs. Portee had died two days earlier. A

meeting between the two men was set for December 18, 1990.

10. At the meeting on December 18, 1990, Petitioner inquired about changing

his mother's retirement benefits from Option 1 to Option 2. Mr. Gonzalez

telephoned the Division of Retirement in Tallahassee, Florida, and was advised

that Mrs. Portee's retirement benefits option selection could not be changed

after her death.

11. A final meeting was conducted on December 24, 1990, between Petitioner,

Mr. Gonzalez, and Mr. Brian Derer, a benefits specialist with Jackson.

Petitioner had come into the office to complete certain documents concerning

Mrs. Portee's life insurance. During this meeting, Petitioner informed Mr.

Gonzalez and Mr. Derer for the first time that Petitioner had power of attorney

from Mrs. Portee. Mr. Gonzalez informed Petitioner that there was nothing he

could do to change Mrs. Portee's option selection after her death. Mr. Gonzalez

explained that he was an employee of Jackson and that neither he nor Jackson was

an agency of the Division of Retirement or the Florida Retirement System.

12. Petitioner contacted the Division of Retirement on January 14, 1991,

for assistance. Petitioner was advised by Stanley Colvin to write to the

Division of Retirement. In response to Petitioner's written request, the

Division of Retirement advised Petitioner that the only benefit to be paid was a

return of contributions to the retirement plan.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has jurisdiction over the

parties and the subject matter in this proceeding pursuant to Section 120.57(1),

Florida Statutes. The parties were duly noticed for the formal hearing.

14. The burden of proof is on Petitioner to show by a preponderance of the

evidence that Petitioner is entitled to receive benefits in accordance with

applicable law and administrative rules. The burden of proof in an

administrative proceeding is on the party asserting the affirmative of an issue

unless the burden is otherwise specifically established by statute. Young v.

State, Department of Community Affairs, 567 So.2d 2 (Fla. 3rd DCA 1990); Florida

Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA

1981); Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349

(Fla. 1st DCA 1977).

15. Section 121.091(1), Florida Statutes, provides that monthly retirement

benefits commence on the last day of the month of retirement and are payable on

the last day of each month thereafter during the lifetime of the retiree. The

effective date of retirement for Mrs. Portee was December 1, 1990. 6/ Mrs.

Portee was entitled under Section 121.091(1) to receive monthly retirement

benefits on December 31, 1990, and on the last day of each month thereafter

during her lifetime. However, Mrs. Portee died on December 6, 1990, before she

received any normal monthly retirement benefits.

16. Section 121.091(6)(e), Florida Statutes, provides that the election of

a benefit option is null and void if the retiree dies before receiving any

benefits. Mrs. Portee's selection of Option 1, therefore, is null and void

pursuant to Section 121.091(6)(e). See also, Rarback v. Department of

Administration, Division of Retirement, 540 So.2d 198, 199 (Fla. 3rd DCA 1989).

17. A retiree whose selection of benefit options is null and void under

Section 121.091(6)(e), Florida Statutes, is treated as having died without

designating a beneficiary. Rarback, 540 So.2d at 199. Section 121.091(8)

provides that death benefits authorized under Chapter 121 are to be paid to the

surviving child in the event the decedent dies without designating a beneficiary

and is not survived by a spouse. Petitioner was the son of Mrs. Portee and her

closest surviving relative.

18. Section 121.091(6)(g), Florida Statutes, does not apply to the facts

in this proceeding. Section 121.091(6)(g) provides in relevant part:

Upon the death of a retired member . . .

receiving monthly benefits under this chapter,

the monthly benefits shall be paid through the

last day of the month of death and shall

terminate, or be adjusted, if applicable . . .

in accordance with the optional form of

benefit selected at the time of retirement.

(emphasis added)

Mrs. Portee was not "receiving monthly benefits" at the time of her death.

Section 121.091(6)(g), therefore, was inapplicable. 7/

19. An employee who dies after applying for retirement benefits but before

receiving such benefits is treated as having terminated his or her employment by

reason of death. Rarback, 540 So.2d at 199. In Rarback, a state employee who

had completed 10 years of service made a claim for disability retirement in

which he selected option 1 for retirement benefits and designated his daughter

as beneficiary. The employee died before receiving any retirement benefits.

The recommended order of the hearing officer denied the surviving spouse's

request to reform the designation of beneficiary to show the wife as the

beneficiary. Respondent's final order adopted the recommended order. The

District Court of Appeal of Florida, Third District, reversed Respondent's final

order. The court found that where an employee with 10 years of service dies

after applying for retirement but before receiving any retirement benefits the

employee's state employment:

. . . terminated by reason of [the employee's]

death . . . prior to his actual retirement,

and accordingly, it must be assumed that he

formally retired as of the date of his death.

Section 121.09(7)(b), Fla. Stat. (1985) . . . .

The court directed that the state retirement

benefits be paid to Mr. Rarback's surviving

spouse in accordance with Sections 121.091(7)

(b) and (8), Florida Statutes.

20. Section 121.091(7)(b), Florida Statutes, provides in relevant part:

If the employment of a member is terminated

by reason of his death subsequent to the

completion of 10 years of creditable service

but prior to his actual retirement, it shall

be assumed that the member retired as of his

date of death . . . having elected . . . the

optional form of payment most favorable to

his beneficiary . . . .

21. Petitioner is the beneficiary of his deceased mother pursuant to

Section 121.091(8), Florida Statutes. Since Mrs. Portee died prior to receiving

any retirement benefits, her selection of Option 1 is null and void under

Section 121.091(6)(e). Mrs. Portee is treated under Section 121.091(7)(b) as

having died after 10 years of service and prior to the date of actual

retirement. Rarback, 540 So.2d at 199. Under Section 121.091(7)(b) and the

holding in Rarback, it is assumed that Mrs. Portee retired as of the date of her

death having selected the optional form of payment most favorable to Petitioner.

22. Section 121.091(6), Florida Statutes, and Florida Administrative Code

Rule 22B-4.010 authorize four optional forms of retirement benefits. The four

options so authorized are the same options as those that were available to Mrs.

Portee when she completed her Application For Service Retirement, Form FR-11, on

November 14, 1990.

RECOMMENDATION

Based upon the foregoing Findings of Facts and Conclusions of Law, it is

RECOMMENDED that Respondent should enter a final order awarding Petitioner

those benefits that are most favorable to Petitioner pursuant to Sections

121.091(6), (7)(b), and (8), Florida Statutes.

DONE and ENTERED this 22nd day of July, 1991, in Tallahassee, Leon County,

Florida.

___________________________________

DANIEL MANRY

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of July, 1991.

ENDNOTES

1/ All statutory references are to Florida Statutes (1989) as amended by

Florida Statutes ( Supp. 1990) unless provided otherwise.

2/ Petitioner's Exhibit 1 is a certified copy of a Power of Attorney executed

by the late Mrs. Portee appointing Petitioner as her attorney. Exhibit 2 is a

copy of a hand written note from Mrs. Portee's treating physician. Exhibit 3 is

the original death certificate for Mrs. Portee. Exhibit 4 is a copy of the

Statement of Retirement Benefit Payments. Exhibit 5 is a copy of a letter from

Petitioner to Mr. Luis L. Gonzalez, Benefit Specialist for Jackson Memorial

Hospital.

3/ Respondent's Exhibit 1 is the deposition of Stanley Colvin, Retirement

Administrator, Survivor Benefits Section, Florida Department of Administration,

with 11 documents attached.

4/ The effective date of Mrs. Portee's termination from employment was October

3, 1990. Her application for retirement, however, was received in November,

1990, more than 30 days after her termination date. The effective date of her

retirement, therefore, is the first day of the month following the month that

the application for employment is received by Respondent. See Respondent's

Exhibit 1 at 6; Florida Administrative Code Rule 22B-4.002(4)(b); and Findings

of Fact, paras. 4-6, infra.

5/ Form FR-11 also provides two other options. Option 3, Member and Joint

Annuitant Benefit, and Option 4, Member and Joint Annuitant Benefit, are not at

issue in this proceeding. The benefit options are described in Section

121.091(6), Fla. Stat., and in Florida Administrative Code Rule 22B-4.010.

6/ The effective date of Mrs. Portee's termination from employment was October

3, 1990. Her application for retirement, however, was received in November,

1990, more than 30 days after her termination date. The effective date of her

retirement, therefore, is the first day of the month following the month that

the application for retirement is received by Respondent. See Respondent's

Exhibit 1 at 6; Florida Administrative Code Rule 22B-4.002(4)(b); and Findings

of Fact, paras. 4-6, infra.

7/ Section 121.091(6)(g), Fla. Stat., also does not apply because the option

selected by Mrs. Portee was null and void.

APPENDIX TO RECOMMENDED ORDER

Petitioner submitted proposed findings of fact. It has been noted below

which proposed findings of fact have been generally accepted and the paragraph

number(s) in the Recommended Order where they have been accepted, if any. Those

proposed findings of fact which have been rejected and the reason for their

rejection have also been noted.

The Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order

of Fact Number of Acceptance or Reason for Rejection

1 Rejected as a conclusion of law

2 Rejected as recited testimony

2.a. Accepted in Finding 1

2.b. Accepted in part in Finding 3

Rejected in part as irrelevant

and immaterial

2.c. Rejected as irrelevant and immaterial

2.(sic) Rejected as irrelevant and immaterial

3. Accepted in Finding 6

3.(sic) Accepted in Findings 4-6

4. Rejected as irrelevant and immaterial

4.a.-e. Rejected as irrelevant and immaterial

but included in the preliminary

statement

Respondent submitted proposed findings of fact. It has been noted below

which proposed findings of fact have been generally accepted and the paragraph

number(s) in the Recommended Order where they have been accepted, if any. Those

proposed findings of fact which have been rejected and the reason for their

rejection have also been noted.

The Respondent's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order

of Fact Number of Acceptance or Reason for Rejection

1 Accepted in Findings 1, 5

2 Accepted in Finding 1

3 Accepted in Finding 2

4 Rejected as irrelevant and immaterial

5 Accepted in Finding 2

6 Rejected as irrelevant and immaterial

7 Accepted in Findings 6, 7

8 Accepted in Finding 9

9 Accepted in Finding 4

10 Rejected as irrelevant and immaterial

11 Accepted in Findings 4, 5

12 Accepted in Finding 6

13 Accepted in Finding 9

14 Accepted in part in Finding 11

Rejected in part as irrelevant and

immaterial

15 Accepted in Finding 11

16 Accepted in part in Finding 3

Rejected in part as a

conclusion of law

17 Accepted in Finding 11

18 Accepted in Finding 12

19-20 Rejected as irrelevant and immaterial

COPIES FURNISHED:

John A. Pieno, Secretary

Department of Administration

435 Carlton Building

Tallahassee, Florida 32399-1550

Linda Stalvey, Esquire

Acting General Counsel

Department of Administration

435 Carlton Building

Tallahassee, FL 32399-1550

Stanley M. Danek, Esquire

Division Attorney

Division of Retirement

Department of Administration

Cedars Executive Center

2639 North Monroe Street

Building C

Tallahassee, Florida 32399

J. Jerry Zeltzer, Esquire

Attorney at Law

420 Lincoln Road, Suite 238

Miami, Florida 33139

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended

Order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period within which to submit

written exceptions. You should contact the agency that will issue the final

order in this case concerning agency rules on the deadline for filing exceptions

to this Recommended Order. Any exceptions to this Recommended Order should be

filed with the agency that will issue the final order in this case.

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ALREE PORTEE,

Petitioner,

vs. DOR Case No. DR 91-09

DOAH Case No. 91-2306

DEPARTMENT OF ADMINISTRATION,

DIVISION OF RETIREMENT,

Respondent.

________________________________/

FINAL ORDER

On June 18, 1991, Daniel Manry, a Hearing Officer of the Division of

Administrative Hearings, held a formal hearing in this case in Miami, Florida.

The Parties were as follows:

For Petitioner: J. Jerry Zeltzer

Attorney at Law

420 Lincoln Road

Suite 238

Miami, Florida 33139

For Respondent: Stanley M. Danek

Division Attorney

Division of Retirement

Cedars Executive Center

2639 North Monroe Street

Building C

Tallahassee, Florida 32399

A Recommended Order was issued on July 22, 1991. A copy of the Recommended

Order is attached hereto, incorporated by reference and made a part of this

Final Order as an exhibit. Having considered the Findings of Fact in the

Recommended Order together with all matters of record reduced to writing, the

Division of Retirement hereby adopts the Findings of Fact in the Recommended

Order. However, because the Conclusions of Law do not reflect the statutory law

and retirement rules, the Conclusions of Law in the Recommended Order are

rejected, and the Conclusions of Law stated below are adopted.

The issue to be decided is whether or not the Petitioner is entitled to

receive benefits under the retirement plan of his deceased mother, Violet

Portee, from the Florida Retirement System, Chapter 121, Florida Retirement

System (hereinafter, FRS).

CONCLUSIONS OF LAW

1. The burden of proof in an administrative proceeding is on the party

asserting the affirmative of the issue that he is entitled to receive the

benefits unless the burden is otherwise specifically established by statute.

Young v. State, Department of Communitv Affairs, 567 So2d 2 (Fla. 3rd DCA 1990);

Balino vs. Department of Health and Rehabilitative Services, 348 So2d 349 (Fla.

1st DCA 1977).

2. Under the FRS, benefits to retired members are paid in accordance with

Rule 22B-4.002(4)(a), F.A.C., as follows:

Benefits will begin to accrue on the

effective date of retirement and will be

payable on the last work day of the month.

3. Rule 22B-4.010(5), Florida Administrative Code, provides as follows:

A member shall select an option for receiving

benefits and may change such option selection

until the time a benefit payment has been

cashed or deposited. Thereafter, the member

shall not be permitted to change the option

he selected and, upon the member's death,

benefits shall be paid in accordance with

such option selection.

4. In accordance with Rule 22B-4.010(5), F.A.C., above, Mrs. Portee could

have changed her option anytime up to the date of her death on December 6, 1990.

Thereafter, no change in the option could be made by her son, and the benefits

payable, if any, were to be paid in accordance with the option she selected.

The Option 1 retirement benefit for December, 1990, is payable to her estate and

the beneficiary is due a refund of the contributions on deposit less the amount

of the December benefit.

5. Rule 22B-4.010(6)(b) F.A.C., provides as follows:

"If the member should die after his effective date of

retirement, his employment will be considered to have

been terminated by retirement, and benefits shall be

payable in accordance with the retirement option

selected as provided by this section, except. . .

1. When the designated beneficiary qualifies as a

joint annuitant, . . . benefits shall be

payable in accordance with the provisions of

Rule 22B-4.008;"

6. Mrs. Portee's date of retirement (effective retirement date) was

December 1, 1990. At that time, she became a retired member of the FRS. Rule

22B-4.002(4)(a). F.A.C., above. Since she lived until December 6, 1990, she

died after her effective retirement date.

7. Under the above rule, if the desicnated beneficiarv is a "joint

annuitant", then Rule 22B-4.008(2)(b), F.A.C., is applicable and states as

follows:

If a member's designated beneficiary qualifies

as joint annuitant (spouse or other dependent)

the following shall apply:

1. The joint annuitant may elect to

receive a refund of the member's

accumulated contributions; or

2. The joint annuitant may elect to

receive a monthly benefit calculated as

if the member had terminated and

retired as of his date of death .

and paid in accordance with Option 3

8. A beneficiary who is the spouse or dependent (financial dependent), is

considered to be a "joint annuitant" under the FRS. The term "joint annuitant"

is referred to in Section l2l.091(6)(a)3 and 4, Florida Statutes, which provide

for Options 3 and 4 under the FRS. Section 121.091(6)(d), Florida Statutes,

states as follows:

A member who elects the option in subparagraph 3. or

subparagraph 4. of paragraph (a) shall, on a form

provided for that purpose, designate his spouse or

other dependent to receive the benefits which

continue to be payable upon the death of the member.

Such persons shall be the joJnt annuitant of the

member.

9. The term "joint annuitant" is defined inRu1e 22B-6.001(34) F.A.C., as

follows:

Means the spouse or any other person who is

financially dependent where the other person is

someone who is receiving one-half or more of

his support from the member or is eligible to

be claimed as a dependent or exemption on the

Federal income tax return of the member.

10. On December 1, 1990, Mrs. Portee had reached her actual retirement

date and then became a retired member of FRS. As a retiree, any benefits payable

at her death are provided for under Rule 22B-4.008(4), F.A.C., which states as

follows:

Upon the death of a retired member, . . . who

is receiving monthly benefits, the benefits

will be paid through the last day of the month

of death and shall terminate, or be adjusted,

if applicable, as of such date in accordance

with the optional form of benefit selected at

the time of retirement.

11. It is clear from the Findings of Fact and the evidence presented at

the hearing that Mr. Portee, age 48 at the time of the hearing, was not the

joint annuitant of his mother under the retirement law and rules and did not

qualify for a continuing benefit.

12. Rule 22B-4.010(6)(b), F.A.C., above, requires benefits to be paid in

accordance with the option selected when the beneficiary does not qualify as

joint annuitant. The Option 1 benefit of Mrs. Portee for December, 1990, was

payable to the estate. (Section 121.091(6)(g), Florida Statutes.) The only

benefits that can be paid to Mr. Portee as specified under Rule 22B-4.010(6)(b),

F.A.C., above, is a refund of accumulated contributions, if any, which were in

excess of the Option 1 benefits paid to her. (Section 121.091(5)(d), Florida

Statutes.)

13. Under Rule 22B-4.010(5), F.A.C., above, a retired member may change

his option selection at any time up to the cashing of the first benefit warrant.

However, Mr. Portee, under the power of attorney, could only have changed the

option on behalf of his mother up to the date of her death and not after her

death since the power of attorney expired at her death. To permit any

beneficiary who is not a "joint annuitant" under the FRS law to change the

option after the death of the retired member would permit significant abuses of

the retirement system. There is no issue that Mr. Portee did not cash the first

benefit warrant and that he withheld cashing the warrant upon the advice of Mr.

Gonzalez. However, as the attorney in fact, Mr. Portee could not legally cash

the first benefit warrant because Mrs. Portee had died before the warrant was

issued. Whatever the importance of those facts, it is equally clear that Mr.

Portee did not advise Mr. Gonzalez of the seriousness of his mother's condition

prior to her death and did not attempt to change her retirement option until

after her death.

14. In this case, Mrs. Portee did not tell Mr. Gonzalez or the Division

that she wanted to change her option. Neither did Mr. Portee make any

affirmative requests to Mr. Gonzalez, but rather he only made inquiries as to

the possibi1itv of changing the option and the method of doing so. Had Mr.

Portee advised Mr. Gonzalez of the seriousness of his mother's condition, then

perhaps, other steps could have been taken before her death by either of them to

change the option selection such as a personal visit to the hospital to see Mrs.

Portee. In the absence of a clear or affirmative request from Mrs. Portee that

she wanted to change her option prior to her death, and in the absence of a

request from Mr. Portee for assistance in changing his mother's option, neither

Mr. Gonzalez nor Jackson Memorial Hospital could know that Mrs. Portee wanted to

change her option and neither had a legal duty to inquire into the medical

condition of Mrs. Portee to determine her ability to make such a request.

15. The Recommended Order concluded that Mrs. Portee's selection of Option

1 was null and void under Section 121.091(6)(e), Florida Statutes, which

provides that "(t)he election of a benefit option is null and void if either the

member, designated beneficiary, or designated joint annuitant dies before

benefits commence". The issue then is when do benefits commence.

16. Section 121.091( i), Florida Statutes, states that:

"[u] pon attaining his normal retirement date,

the member, . . . shall receive a monthly

benefit which shall commence on the last day

of the month of retirement and be payable on

the last day of each month thereafter during

his lifetime."

That benefit, which accrues on the first of the month following application for

retirement and termination of employment, is a vested benefit (Section

121.011(3)(d), Florida Statutes). The Division must make the retirement payment

to the member on the last day of the month of retirement (the month following

application) for that month and for each month the member lives. This statutory

duty to make payments at the end of the month after the effective retirement

date is clearly set forth in Section 121.091(1), Florida Statutes, which states

that:

"Upon the death of a retired member .

receiving monthly benefits under this chapter,

the monthly benefits shall be paid through the

last day of the month of death and shall

terminate, or be adjusted, if applicable, as

of that date in accordance with the optional

form of benefit selected at the time of

retirement."

17. Therefore, the accrual of benefits commences on the first day of the

month following application (the effective retirement date) even though the

actual payment of the warrant is not made until the last day of the month. It

is to be remembered that the commencement of, or the right to receive a

retirement benefit, is not to be confused with actual avment of that benefit.

It is therefore the right to receive a monthly benefit rather than the actual

receiit of that benefit which determines when benefits commence under Chapter

121, Florida Statutes. (See Rule 22B-4.002(4)(a), F.A.C.)

18. In support of the conclusion that Mrs. Portee's option selection is

null and void under Section l2l.091(6)(e), Florida Statutes, the Recommended

Order cites Rarback et al vs. Department of Administration, Division of

Retirement, 540 So2d 198 (Fla. 3rd DCA 1989). However, a close reading of the

Rarback opinion shows that it is not applicable to this case. According to the

opinion, the member in the Rarback case terminated his state employment "by

reason of his death after 10 years of creditable service, but prior to his

actual retirement, . . . " (emphasis added). A member's actual retirement is

the date on which he has a legal right to receive benefits and based on

application for those benefits. (See Rule 22B-4.002(2) and (4), F.A.C.) The

member is therefore vested in that specific benefit amount as of the date of

retirement. The actual retirement date is the first of the month following

receipt of application for retirement. Arnow vs. Arnow, 343 So2d 1309 (Fla. 1st

DCA 1977); see Section 121.011(3)(d), Florida Statutes, as to the contractual

nature of the rights under FRS; Florida Sheriffs Association vs. Department of

Administration, Division of Retirement, 408 So2d 1033 (Fla. 1981). Therefore, by

the language used by the Court in Rarback, Mr. Rarback died prior to the actual

date of retirement, and his option selection was ineffective. His beneficiary,

the daughter, had no right to receive benefits, and the benefits went to the

surviving spouse pursuant to Section 121.091(8), Florida Statutes. To the

contrary, in the case at bar, Mrs. Portee died after her actual date of

retirement (effective date of retirement). Therefore, her option selection was

valid. Her son, as the designated beneficiary, had a right to receive only

those benefits provided by statute. In this case, those benefits would be a

return of the contributions paid by Mrs. Portee into her retirement account.

The facts in Rarback are different than the facts in the instant case, and

therefore the applicable law is different. Clearly, the Rarback case is not on

point.

19. Based on the Rarback decision, the Recommended Order concludes that

Mrs. Portee was not receiving a monthly benefit; however, in fact and in law,

she had a contractual right to the benefit and already was accruing a monthly

benefit. Section 121.091(1), Florida Statutes and Rule 22B-4.002(2) and (4),

F.A.C.

20. Section 121.091(7)(b), Florida Statutes, does not alter the above

legal conclusion. This section deals with cases in which the members have

completed 10 years of service but died "prior to his actual retirement."

(emphasis added) This section does not apply to the instant case, because Mrs.

Portee died after reaching her actual retirement date of December 1, 1990.

21. Next, Petitioner argues that he had a power of attorney and thus had

the right to make such a change in option selections. Mr. Portee did not advise

Mr. Gonzalez of the existence of the power of attorney until well after his

mother's death. Since he took no actions prior to the death of his mother, and

in fact did not notify Mr. Gonzalez of the existence of the power of attorney

until December 24th, Mr. Portee cannot change the retirement option chosen by

his mother after her death, because the power of attorney expired at the death

of Mrs. Portee on December 6, 1990, and Mr. Portee could not exercise it

thereafter. 2 Fla. Jur 2d, Agency and Employment, s. 23. Since the Petitioner

himself stated that he did not believe that his mother was competent to make the

decision as to the option selection, one could argue that she was not competent

to even decide to retire; in which case, the power of attorney expired on or

about November 14, 1990 (2 Fla. Jur 2d, Agency and Employment, s. 20.), and Mr.

Portee would have been without power to change the retirement option selected by

his mother.

22. The final argument made by Petitioner at the hearing is that the

Division should be estopped from denying his request because of the

representations of Mr. Gonzalez. The issue here is whether Jackson Memorial

Hospital is the agent of the Division for retirement matters. Mr. Gonzalez

stated that Jackson Memorial Hospital did not have any agency relationship with

the Division and merely assisted its employees in completing necessary

retirement forms and providing them with retirement literature that had been

prepared and distributed by the Division to all participating public agencies

under the FRS.

23. Equitable estoppel may be used against the State only in exceptional

circumstances. In Tri-State Systems, Inc., vs. Department of Transportation,

500 So.2d 212 ( Fla 1st DCA 1986), the Court stated that certain elements must be

present for estoppel to apply; these elements are:

a. A representation as to a material fact  h a t

is contrary to a later-asserted position;

b. reliance on that representation;

c. a change in position detrimental to the

party claiming estoppel, caused by the

representation and reliance thereon.

24. While Mr. Gonzalez did make a representation to Mr. Portee that the

retirement option could be changed by the retired member not cashing the first

warrant, Mr. Portee failed to advise Mr. Gonzalez of the critical medical

condition of his mother. His omission of that fact dramatically changes the

situation regarding Mrs. Portee's ability at a later date to change the option

selected earlier by her. The failure to notify the agency was a mistake made by

Mr. Portee and was not an error made by Mr. Gonzalez. The issue of estoppel is

not available to Mr. Portee because of the omission of significant information

by Mr. Portee.

25. Further, Jackson Memorial Hospital is not the agent of the Division,

and therefore has no legal authority to speak on behalf of the Division nor to

bind the Division. Any advice given by any FRS agency, including Jackson

Memorial Hospital, is advisory only and not binding upon the Division. The

holding in the Tri-State case, above, and the cases cited therein, concern

situations where the agencv or its emplovees made statements to individuals

concerning rights or benefits. Neither the Division nor its employees made any

such representations to either Jackson Memorial Hospital or to Mr. Portee. In

Harris vs. State, Department of Administration, Division of State Em1oyees'

Insurance, 577 So2d 1363 ( Fla 1st DCA 1991), the health insurance "benefit

document clearly refers questions regarding coverage to the various agencies'

personnel offices, and in doing so, the division (of State Employees' Insurance)

made (the employer) its agent." There is no showing of agency in the case at

bar, and Mr. Portee's argument of estoppel is denied.

26. Petitioner's claim for entitlement to receive Option 2 retirement

benefits under his mother's retirement plan is not supported by the facts nor by

the law. It is not reasonable to conclude that a person who failed to advise

the agency of the serious condition of his mother, who did not advise the agency

of the existence of a power of attorney, and who waited for 3 weeks after his

mother's death to produce the power of attorney, should be permitted to change

the retired member's selection of the Option 1 benefit after her death and to

claim a retirement benefit under Option 2 as the designated beneficiary.

THEREFORE, based on the above and foregoing, it is:

ORDERED and DIRECTED that the Petitioner, Alree Portee, is not eligible to

receive benefits under the retirement account of his deceased mother, Violet

Portee. It is further,

ORDERED and DIRECTED that Alree Portee, as the designated beneficiary, is

eligible to receive only a refund of the contributions paid by Mrs. Portee into

her retirement accountminus the amount of the Option 1 benefit for December,

1990.

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL

REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE

GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE

COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE

DIVISION OF RETIREMENT, AND A SECOND COPY, ACCOMPANIED BY THE FILING FEES

PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH

THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES.

THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO

BE REVIEWED.

DONE and ORDERED this 14th day of November 1991, at Tallahassee, Leon

County, Florida.

____________________________

A. J. MCMULLIAN, III

State Retirement Director

DIVISION OF RETIREMENT

Filed with the Clerk of the

Division of Retirement this

15th Day of November, 1991.

____________________________

BETTY ANN LEDFORD

Clerk

Division of Retirement

Copies furnished to:

J. Jerry Zeltzer, Esquire

Attorney at Law

420 Lincoln Road, Suite 238

Miami, Florida 33139

Daniel Manry

Hearing Officer

Division of Administrative Hearings

DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399

Stanley M. Danek, Esquire

Division Attorney

Division of Retirement

Cedars Executive Center

2639 North Monroe Street

Building C

Tallahassee, Florida 32399