91-004652 Lori Burns, Representative Of Samuel A. Burns vs. Division Of Retirement Status: Closed Recommended Order on Wednesday, January 22, 1992.

Summary: Dying employee who could not comprehend nature of his option election does not preclude beneficiary from getting longer payout of retirement pay.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LORI BURNS, )

)

Petitioner, )

)

vs. ) CASE NO. 91-4652

)

DEPARTMENT OF ADMINISTRATION, )

DIVISION OF RETIREMENT, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

A hearing was held in this case in Vero Beach, Florida on November 14,

1991, before Arnold H. Pollock, a Hearing Officer with the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Ronald S. Fanaro, Esquire

Grall and Fanaro

P. O. Box 2110

Vero Beach, Florida 32961-2110

For Respondent: Stanley M. Danek, Esquire

Division of Retirement

Cedars Executive Center, Bldg. C

2639 N. Monroe Street

Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUES

The issue for consideration in this hearing is whether the decedent, Samuel

A. Burns, was competent to elect a survivor's benefit option upon execution of

retirement papers on October 4, 1990.

PRELIMINARY MATTERS

By letter dated June 13, 1991, A. J. McMullian, III, state retirement

director, advised Petitioner herein that the retirement option selection by her

deceased husband, Samuel A.

Burns, could not be changed, and that upon his death, all retirement

payments ceased. Thereafter, by Petition for Formal Proceedings, Petitioner's

counsel requested a formal hearing on the contested issue of whether Mr. Burns'

option selection could be modified, and by notice dated July 24, 1991, the

matter was forwarded to the Division of Administrative Hearings for the

appointment of a Hearing Officer. After the parties' response to the Initial

Order entered herein, the undersigned, on August 9, 1991, set the matter for

hearing in Vero Beach on November 11, 1991. On August 12, 1991, the date of

hearing was changed to November 13, 1991, and on August 26, 1991, the date of

hearing was again changed to November 14, 1991, at which time the matter was

heard as scheduled.

At the hearing, Petitioner presented the testimony of Dr. Michaela Scott,

an oncologist and expert in the fields of internal medicine, hematology and

oncology; Dr. Charles J. Ahr, PhD, a clinical psychologist and expert in that

field; and testified in her own behalf. Petitioner introduced Petitioner's

Composite Exhibits 1 and 2. Respondent presented the testimony of Gloria Ann

Pfund, an executive secretary to the Indian River County Assistant

Superintendent of Education for personnel, and Dr. Julius J. Teske, the said

Assistant Superintendent. Respondent also introduced Respondent's Exhibits A

through F which included the deposition of Stanley Colvin, supervisor of the

Division's survivor benefits section.

Subsequent to the hearing, Respondent submitted Proposed Findings of Fact

which have been ruled upon in the Appendix to this Recommended Order.

Petitioner's counsel submitted a Memorandum of Facts and Law in which he

evaluated the evidence presented but did not make specific Findings of Fact upon

which a specific ruling as to acceptability can be made.

FINDINGS OF FACT

1. At all times pertinent to the matters involved herein, the Petitioner,

Lori M. Burns, was the surviving spouse of Samuel A. Burns who, prior to his

death, was a member of the Florida Retirement System, (FRS). Respondent,

Division of Retirement, (Division), is the state agency charged with the

responsibility of administering said retirement system.

2. Prior to his retirement on December 1, 1990, Samuel A. Burns was

employed by the Indian River District School Board as a high school humanities

teacher, and at the time of his retirement had 26.3 years of creditable service

in the FRS.

3. In early March or April, 1990, Mr. Burns was diagnosed as having cancer

of the esophagus by his attending physician, Dr. Lui. Sometime thereafter, he

became the patient of Dr. Michaela Scott, an oncologist, and was later treated

by Dr. Nava, a surgeon with the Roswell Park Cancer Institute, ( Roswell), in

Buffalo, New York.

4. When Dr. Scott first saw Mr. Burns on April 16, 1990, her opinion was

that his prognosis was poor, and she felt he would be best served by treatment

at Roswell. Surgery was done there after which Mr. Burns was able to eat.

Initial radiation treatment and chemotherapy was administered and Mr. Burns was

returned to Vero Beach for follow-up radiation treatment and chemotherapy.

According to Dr. Scott's office notes, he resumed this treatment on May 29,

1990.

5. Though he seemed to improve somewhat for a while, his condition

subsequently deteriorated and in August, 1990, Mr. Burns returned to Roswell for

further evaluation. The radiation therapy and chemotherapy he had received in

the prior months had reduced the size of the tumor and this now permitted

surgery. On August 13, 1990, Dr. Nava at Roswell again operated on Mr. Burns to

remove more of the cancerous area and the indications at that time were that it

all had been excised. The doctor told him that with proper diet and exercise, he

should be able to regain his strength and continue to lead a productive life.

However, according to the medical records, Mr. Burns suffered a heart attack

during the operation, and from that point on was required to take heart

medication.

6. Mr. Burns returned to Vero Beach after the second surgery but the

surgeon's prognosis did not materialize and in the opinion of Dr. Scott, his

condition was poor. During this period of presumed recovery, Mr. Burns became

depressed and nervous and Dr. Scott prescribed tranquilizers for him which, in

her opinion, he abused. The drugs he was taking at the time included halcyon, a

sleeping pill; prozac, an anti-depressive; procardia, a beta blocker for his

heart condition; tylenol #3 for pain; and xanax, an anti-anxiety medication.

During this period, Mr. Burns continued to experience great difficulty in eating

and was unable to regain any of the weight he had lost as a result of his

inability to eat because of the cancer. Dr. Scott felt his depression was a

result of a combination of his condition and the fact he was abusing some of his

medications.

7. Dr. Scott also believed that as a result of his depression, Mr. Burns

was indirectly suicidal. By that she meant he would refuse some medications

felt necessary for his condition. He also started drinking. She felt this was

enough for her to refer him to a psychologist for help with the depression.

8. Mr. Burns first went to see Dr. Charles J. Ahr, a clinical

psychologist, upon the referral of Dr. Scott, on November 7, 1990. At that

first visit, Dr. Ahr took a patient history during which Mr. Burns indicated

that a doctor had told him he would not survive for more than a couple of

months. Mr. Burns traced the course of his illness and treatment up to that

time, indicating to Dr. Ahr that after the surgery he had been told all the

cancer had been removed and he could resume a normal life if he could get his

strength back. Mr. Burns claimed he came to Dr. Ahr because he could not do

that, and in the doctor's opinion, he appeared preoccupied with his inability to

eat.

9. It became very clear right away to Dr. Ahr that Mr. Burns was very

depressed. In fact, Burns stated to him, "I'm alive only because Lori wants me

to be." This indicated to Dr. Ahr there was a deep depression, and he noted Mr.

Burns was taking psycho- active medications at the same time he continued to use

alcohol, an inappropriate behavior. Dr. Ahr felt Mr. Burns was an alcoholic.

10. Dr. Ahr's clinical diagnosis at the time was that Mr. Burns was

suffering an adjustment reaction with depression which was related to a severe

medical condition. In his opinion, Mr. Burns consciously felt he was free of

the cancer, but subconsciously knew he was in a death struggle with it. Mr.

Burns was an intellectual and rationalized his situation. He was in what is

psychologically known as massive denial which is the psychological process of

not accepting the truth in favor of a preferred position. Dr. Ahr believed that

at some level of his psyche, Mr. Burns knew he was not doing well. His weight

stayed constant and he was not able to eat. His strength fluctuated and he

showed continuing evidence of a terminal illness but continuously denied it.

This was a distortion of the reality that the cancer of the esophagus had a very

low cure rate. He had been told he was cured, but apparently no one had ever

told him of the small chance that the cure was permanent.

11. Denial and depression is a serious psychological problem. Denial is

normal with a terminal illness, but the depression may lead to suicidal

thoughts.

12. Having reviewed the retirement application form and being advised of

the terms of the four retirement options thereon, Dr. Ahr believes that based

upon his diagnosis of denial and depression, Mr.Burns could not have knowing

acted rationally and reasonably on these choices. When Dr. Ahr saw Mr. Burns,

Mr. Burns was not doing well. This was in November of 1990, some one month

after Mr. Burns had already signed the retirement papers indicating his

selection of Option 1. Nonetheless, Dr. Ahr believes that because of the fact

that Mr. Burns was not doing well, was continuing to have eating problems, and

was under a great deal of stress and depression, he was not competent to make an

option decision at the time he did. Simply put, Mr. Burns would, in the

doctor's opinion, have chose an option predicated on his mistaken belief of long

life rather than on reality. His desire to elect a member only benefit is

irrational and he was a rational man.

13. Dr. Ahr found Mr. Burns to be a man very devoted to his wife and all

he cared about was her. Therefore, the election of an option which cut her out

of any support or protection was, in the doctor's opinion, irrational. He

contends Mr. Burns believed he would live a long time but that belief was

irrational based upon denial and depression within the realm of reasonable

psychological probability and certainty.

14. On October 4, 1990, Mr. Burns signed the application for retirement

which he had had his wife pick up from the school board office sometime

previously. Dr. Scott saw him on that day. Her notes show he was shaky and

tremulous, and felt so poorly she considered sending him back to Buffalo for

additional treatment. In her opinion, his condition was so evident, even one

not a medical professional could tell it. As she saw it, Mr. Burns had a

difficult time initially coping with his terminal illness. The knowledge he was

to die put him into a state of shock, and he thereafter went into depression

which continued on a regular basis. She felt his depression was so deep as to

put him into a fog bank situation in which he could comprehend very little of

what was going on.

15. Dr. Scott also reviewed the option form that Mr. Burns executed on

October 4, 1990 and feels that given his state of mind and physical condition at

the time, with the drugs he was taking, he would not have been capable of

understanding the retirement options available to him. Though he was a bright

man, she would not have wanted him to sign any legal document at that time.

With the clouded emotions he was experiencing, plus the drugs he was taking,

plus the anger he had, he should not have done anything so important. In fact,

Dr. Scott didn't even want Mr. Burns to retire. She had discussed retirement

with him but she felt continuing to work, or the potential therefor, would have

helped his condition.

16. Mr. and Mrs. Burns were married for 23 years during all of which time

he was a teacher in Indian River County. Prior to developing his cancer, Mr.

Burns took care of all the financial matters for the family. He and his wife

executed mutual wills in 1986 which was the last time they did that. They owned

all their assets jointly. Mr. Burns had life insurance of about $31,000.00 with

Mrs. Burns as his beneficiary. This preexisted the inception of his illness and

no change was made subsequent to his diagnosis. The parties owned no

certificates of deposit, no savings accounts, no stocks, and merely a small

checking account. He was a school teacher and due to the minimal salary earned,

and the fact that they put three children through college, they had very little

in the way of assets. They own a house in the Bahamas which was purchased with

money he inherited from him family. Mrs. Burns works for the Center for Arts in

Vero Beach and takes home approximately $600.00 every two weeks. The house in

which she lives, owned by them, has a $500.00 plus monthly mortgage payment.

17. When Mr. Burns returned from his second surgery, in September, 1990,

he was not doing well. He was weak and could not live as he wanted to.

Nonetheless, he tried to eat; he walked the dog; he took rides; and yet, with

all the effort made, he did not recover as he would have desired. Mrs. Burns,

who gave him his medications, would hide them because she was afraid he would

commit suicide as did a friend who had a similar condition. According to Mrs.

Burns, her husband approved that friend's action. Though Mr. Burns was still

drinking alcohol, his inability to swallow limited his intake. Still, because of

his condition, the medications tended to aggravate his depression.

18. Prior to going to Buffalo for surgery in August, 1990, Mr. Burns

contacted the school superintendent's office to arrange for a substitute for

several weeks while he was gone. When he returned after surgery, and found his

recuperation would take much longer than he had anticipated, he determined he

would not have the stamina to resume teaching.

19. Though the evidence indicates she did so, Mrs. Burns does not recall

picking up any retirement applications from the school board office for her

husband. He never discussed any retirement options with her nor did she help

him fill out the forms. Only when he said he had some papers to sign at the

school board did she take him there, and even then, she did not go in with him.

As a result, she was not aware of what option he chose or what options were

available to him. Even after he signed the retirement papers, he did not

discuss what option he had chosen.

20. Mr. Burns' official date of retirement was November 19, 1990 with his

retirement effective December 1, 1990. His first check, which he received in

January, 1991 was sufficient to make up any accruals, but Mrs. Burns does not

know when that check arrived. In fact, when her husband passed away, she did

not know that the checks would cease. It was only when she received the letter

from the Division, stating that no more would come, did she find out her true

situation. At no time prior to his death did Mr. Burns tell his wife he had

made a mistake regarding his retirement options, but in retrospect she claims to

have serious doubts that during the October/November, 1990 period Mr. Burns had

the ability to handle his financial affairs. Nonetheless, she never asked him

about his retirement or any other financial arrangements made for her to take

effect upon his death.

21. At some time prior to October, 1990, Mrs. Gloria Pfund, secretary to

the Assistant Superintendent for Personnel at the Indian River School District,

gave retirement application forms to Mrs. Burns who came in to pick them up. On

that visit, they very briefly discussed Mr. Burns' condition. Mrs. Pfund gave

no instructions or any additional material concerning retirement options to Mrs.

Burns, nor did she have any further discussion with either one until on October

4, 1990, when Mr. Burns came to her desk, gave her the form already filled out,

and signed it in front of her.

22. During this visit, they talked briefly about his health and school and

she took him in to shake hands with her boss, Dr. Teske, the Assistant

Superintendent for Personnel. Though she did not shake hands with him then, she

noticed that he did not appear to be trembling nor was his voice weak. Though it

was not as vibrant as it would be in the classroom, it was, nonetheless, a

normal conversational voice. Based solely on the conversation she had with him

that day, she would not have known he was sick. However, she knew he was ill

because he was enrolled in the sick leave bank.

23. Mrs. Pfund notarized Mr. Burns' signature on his retirement

application. If the individual appearing before her for that purpose does not

appear to comprehend what he or she is doing, she will inquire about it. In

this case, Mr. Burns did not show any uncertainty or confusion about the form.

He did not ask any questions nor did he make any comments. Had he done so, she

would have referred him to Dr. Teske, but here she was satisfied Mr. Burns knew

what he was doing. After signing the documents and having the brief talk with

Dr. Teske, Mr. Burns left the office.

24. When Dr. Teske spoke with Mr. Burns on that day, it was the

culmination of a series of events leading up to the retirement. In August,

1990, Mr. Burns called the school board after his first operation and said he

would not be back and needed a substitute teacher to be hired. He followed up

this contact with a letter dated August 4, 1990 in which he also noted a

potential need for enrollment in the sick leave bank. Mr. Burns had first

applied for sick leave bank withdrawal in May, 1990, and his second application

for withdrawal was received on August 13, 1990, after his August 4 letter. It

was approved the following day. When Dr. Teske notified the school principal to

hire a substitute, he indicated the period would be for up to 4 weeks based on

information he had received from Mr. Burns. However, on October 1, 1990, Mr.

Burns wrote to the board indicating his intention to retire as of November 20,

1990, and the board subsequently accepted that retirement.

25. When Teske met with Mr. Burns on October 4, their discussion was very

general, consisting of reminiscences and discussions of other people, as well as

a very general discussion regarding Mr. Burns' condition. At that time they had

no discussion of possible retirement options and though it is board policy not

to suggest a particular option to a potential retiree, they can, and do when

necessary, point out what the options are and explain them. In this case, Dr.

Teske did not feel Mr. Burns needed that explanation. He did, however, indicate

to Mr. Burns he would qualify for the 15% retirement incentive, a one time

payment which is a board payment not related to the state retirement fund.

26. Dr. Teske also believes he shook hands when Mr. Burns left the office.

At no time did he notice any trembling or any other type of infirmity. In fact,

Mr. Burns seemed to know what was going on though he did not specifically state

he had brought his retirement papers in. His comments were appropriate, and his

comments and demeanor appeared normal. Though his voice was somewhat lower, it

was not a whisper.

27. In this case, on October 4, 1990, Mr. Burns selected Option 1 with an

effective retirement date of December 1, 1990. Option 1 provided full retirement

benefits to the retiree to the point of death with no payment to any survivor.

28. On October 24, 1990, as is its usual procedure, the Division sent a

form to Mr. Burns showing that consistent with his option selection, he had

elected Option 1 and asking him, in addition, if he wanted to add to his

retirement credit by purchasing time for his military service. In response, by

executing a form back to the Division on November 26, 1990, Mr. Burns indicated

he did not wish to purchase his military service. That same day, the Division

sent Mr. Burns an estimate of his retirement benefits which reiterated a

statement made to him on a prior form that once an option selection was made, it

could not be changed after a retirement benefit payment made under that option

selection had been cashed or deposited. The estimate form sent out on November

26, 1990 also contained a form "OPT-FRS" which contains a detailed explanation

of all retirement options.

29. After Mr. Burns retired on December 1, 1990, the

Division sent him another letter advising it was placing him on the retirement

payroll effective January 1, 1991, and reaffirming that he had selected Option

1.

30. Mr. Burns died on May 1, 1991. This information was communicated to

the Division by Mrs. Pfund on May 17, 1991. Thereafter, on June 10, 1991, the

Division sent a letter to Mrs. Burns advising her that her husband's retirements

benefits had ceased at the time of his death because the retirement checks

received by him between January 1, 1991 and his death had been cashed. Under

the Division's rules, this prevented any change in the option selection.

CONCLUSIONS OF LAW

31. The Division of Administrative Hearings has jurisdiction over the

parties and the subject matter of this proceeding. Section 120.57(1), Florida

Statutes.

32. Payment options under the FRS are provided for in Section 121.091(6),

Florida Statutes. The Division of Retirement has been charged with the

administration of the FRS and has, consistent therewith, promulgated Chapter 22B

which, among other things, outlines the options available. They are:

Option 1: A monthly benefit payable to the retiree for

his or her lifetime. Upon the retiree's death the

monthly payment ceases and the retiree's beneficiary

receives only a refund of any contributions the retiree

had made which exceeds the amount paid to the retiree.

Option 2: A reduced monthly benefit payable to the

retiree for life. If the retiree dies before receiving

120 monthly benefits payments, the designated

beneficiary will receive the same monthly benefit for

up to a total of 120 months.

Option 3: A reduced monthly payment to the retiree for

life and upon the retiree's death, his/her joint

annuitant will receive the same payment as the retiree

for life.

Option 4: A reduced monthly payment to the retiree

while both the retiree and the joint annuitant are

alive. Upon the death of either, the payment to the

survivor is reduced for the life of the survivor to 2/3

of the payment made while both were living.

Rule 22B-4.002(3), F.A.C. provides:

After a retirement benefit payment has been cashed or

deposited, no additional service may be purchased and

the selection of an option may not be changed.

33. Retirement benefits vest at the time of retirement when the retiree

receives his first retirement payment. Arnow v. Williams, 343 So.2d 1309 (Fla.

1DCA 1977). Consequently, when Mr. Burns received his first payment on December

31, 1990, and cashed the warrant, his retirement had vested, and he could not,

under the terms of the rule stated, supra, thereafter change his option

selection.

34. Mr. Burns could have changed his option at any time up to the time he

cashed his first retirement benefit warrant. Petitioner alleges, however, that

since the evidence shows Mr. Burns was not competent to make an option selection

when he did, his selection is not valid and his status should be as though he

had made no selection. Under the Division rules, when no option is selected,

the case is handled as though Option 3 had been selected.

35. Both Dr. Scott and Dr. Ahr, the oncologist and the psychologist,

respectively, conclude that in their professional opinion, Mr. Burns' mental

state was such at the time he returned from his second trip to Buffalo and

thereafter, that he could not make a rational, informed choice as to retirement

options. His depression, his abuse of drugs and alcohol, and his delusional

belief that he was going to get well and live on caused him to make irrational

decisions and conclusions about his personal affairs.

36. The other evidence, however, indicates that other than for his

drinking and suspected abuse of prescription drugs, Mr. Burns showed no

aberrational behavior either at home or in his relationship with others. He

called in and arranged for a substitute teacher when he found he would not be

able to teach as scheduled. He made the conscious determination to retire and

sent his wife to pick up the retirement forms. He selected an option in front

of an Mrs. Pfund, an individual who knew him well and who found him to be

somewhat subdued but otherwise acting normally. He spoke with Dr. Teske at

length leaving him with the impression of normalcy. He received an inquiry

regarding his desire to purchase his military service as a credit toward

retirement and apparently made the rational decision to decline that

opportunity. When, after selection, he was advised again by the Division of the

option he had selected and given the opportunity to change it he declined to do

so even though that communication clearly notified him that negotiation of his

first payment would preclude further change.

37. None of this, however, is inconsistent with the expert opinions of

Drs. Scott and Ahr that though he may have acted rationally in everyday life,

Mr. Burns was irrational in his understanding of and coping with actions

regarding his illness and impending demise. Both felt Mr. Burns had

subconsciously rejected the imminence of his death. He did not recognize it and

could not accept it. Consequently, absent any evidence that Mr. Burns wanted to

deprive his wife of 23 years of any survivor benefits, knowing that because she

was so much younger than he she should could be expected to survive him for many

years, it must be concluded that when he made his option selection he was

rejecting the imminent nature of his death and his action was not rational. As

such, it is evidence of an inability to make an informed, rational option

choice.

38. Petitioner has the burden to establish, by a preponderance of the

evidence, that Mr. Burns was in such a state of mind he could not comprehend the

nature of the option he selected. The expert opinion testimony of Dr. Scott and

Dr. Ahr, is impressive and persuasive. Both stated they would not have wanted

him to have to make his option choice in his then current state, and that

evidence, even when viewed against the other evidence of record regarding his

conduct around the time the choice was made is sufficient to carry Petitioner's

burden.

RECOMMENDATION

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

therefore recommended that a Final Order be entered granting Petitioner's

request to have Mr. Burn's election of retirement option declared invalid.

RECOMMENDED in Tallahassee, Florida this 22nd day of January, 1992.

______________________________

ARNOLD H. POLLOCK

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 January, 1992.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-4652

The following constitutes my rulings, pursuant to Section 120.59(2),

Florida Statutes, on all Proposed Findings of Fact submitted by the parties to

this proceeding.

FOR THE PETITIONER:

No specific proposed Findings of Fact submitted.

FOR THE RESPONDENT:

1. & 2. Accepted and incorporated herein.

3. - 7. Accepted and incorporated herein.

8. Accepted and incorporated herein.

9. - 12. Accepted but more a recitation of the contents of

office notes than Findings of Fact.

13. Accepted.

14. Accepted.

15. Rejected.

16. Accepted.

17. Accepted but not dispositive of the issue.

18. & 19. Accepted.

20. Accepted and incorporated herein.

21. & 22. Accepted and incorporated herein.

23. Accepted and incorporated herein.

24. & 25. Accepted and incorporated herein.

COPIES FURNISHED:

Stanley M. Danek, Esquire

Department of Administration

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

Ronald S. Fanaro, Esquire

Post Office Box 2110

Vero Beach, Florida 32961

A. J. McMullian, III

Director Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

John A. Pieno

Secretary

Department of Administration

435 Carlton Building

Tallahassee, Florida 32399-1550

Augustus D. Aikens, Jr.

General Counsel

Department of Administration

435 Carlton Building

Tallahassee, Florida 32399-1550

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 consult with the agency which will issue the

Final Order in this case concerning its rules on the deadline for filing

exceptions to this Recommended Order. Any exceptions to this Recommended Order

should b e filed with the agency which will issue the Final Order in this case.

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

AGENCY FINAL ORDER

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

STATE OP FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LORI BURNS,

Petitioner,

Vs. DOAH Case No. 91-4652

DOR Case No. DR 91-16

DEPARTMENT OF ADMINISTRATION,

DIVISION OF RETIREMENT.

Respondent.

____________________________/

FINAL ORDER

On November 14, 1991, Arnold H. Pollock, a Hearing Officer with the

Division of Administrative Hearings, held a formal hearing in this case in Vero

Beach, Florida. Thereafter, the Parties timely submitted proposed findings of

fact and conclusions of law. The transcript of the hearing was ordered and

considered in the determination of the facts of this order. The Parties are as

follows:

APPEARANCES

For Petitioner:

Ronald S. Fanaro, Esquire

Grall & Fanaro

Post Office Box 2110

Vero Beach, Florida 32961-2110

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 January 22, 1992. 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, all matters of record and the transcript of the final

hearing, the Division of Retirement hereby adopts in part and rejects in part

the Findings of Fact of the Recommended Order as follows:

FINDINGS OF FACT

1. Adopted.

2. Adopted.

3. Adopted.

4. Adopted.

5. Adopted, with the additional fact that the surgeon, Dr. Nava, thought

the surgery had been much more successful than he had hoped (T-42).

6. The first sentence is rejected as not being supported by the evidence.

After surgery such as Mr. Burns had, Dr. Scott stated that she expected him to

take three months to recuperate. (T-35) His visits for the first few months

were positive, and his progress was about right for six to seven weeks

postoperative. (T-37, 38, 39 and 40)

7. The first, second and fourth sentences are adopted. The third sentence

is rejected. Mr. Burns had been drinking for a long time and was considered an

alcoholic. (T-61)

8. Adopted.

9. Adopted.

10. Adopted.

11. Adopted as a general statement made by Dr. Ahr but without reference

or application to the situation of Mr. Burns.

12. The first three sentences are adopted. The remaining sentences are

rejected as not being based on the evidence and therefore, not competent,

substantial evidence. Dr. Ahr testified that he could not state that Mr. Burns

did not know what the different options meant nor that he (Burns) didn't know

the implications of those options when he signed the form. (T-96) Further, Dr.

Ahr testified that he did not see Mr. Burns for over a month after he signed the

retirement form and that he didn't know how severe Mr. Burns' depression was on

October 4th. (T-88) He only assumed that the depression was as bad or worse on

October 4th. (T-87)

13. Accepted as being the testimony of Dr. Ahr, but rejected as not being

based on the evidence, and, therefore, not competent, substantial evidence. Dr.

Ahr made several statements that contradicted his conclusion that Mr. Burns

acted irrational in selecting Option 1. First, he even thought the statements

of Dr. Nava were positive and Mr. Burns believed them (T-74, 76 and 82); it was

Dr. Ahr who chose not to believe them, even though he had not checked with Dr.

Scott (T-73 and 87) and Dr. Nava (T-87), nor did he have any psychological or

psychiatric reports that would have aided him. Second, Mr. Burns earlier had a

series of doctor visits in which he continuously improved, even to the point of

being free of depression (T-82). He made comments to Dr. Ahr that he felt like

a million dollars (T-77), that he wanted to live for the sake of living rather

than for his wife's sake (T-79), he was driving his car (T-79), the depression

had lifted (T-82), and that he was getting better each day (T-84).

14. Accepted as the testimony of Dr. Scott.

15. Sentences 1 through 3 are accepted as being the testimony of Dr.

Scott, but rejected as not being competent, substantial evidence. Dr. Scott

testified that she was not stating that Mr. Burns did not know what he was doing

when he signed the retirement form, but was only stating that she would not have

recommended it and would have advised against it. She also stated that she did

not know what mental condition Mr. Burns had been in and did not know if he

understood the options on the retirement forms (T-50-51). Sentences 4 and 5 are

accepted.

16. Sentence 1 is accepted. Sentence 2 is rejected as not being based on

the evidence. Mr. Burns continued to handle the financial affairs of the family

up to just prior to his death (T-101, 104, and 119-120). The remainder of the

Finding is accepted.

17. Adopted.

18. Adopted.

19. Adopted.

20. Sentences 1 and 2 are accepted. Sentences 3 and 4 are accepted as

being the testimony of Mrs. Burns, but are rejected as not being based on the

evidence. Mr. Burns died on May 1, 1991. However, April 30, 1990, prior to his

death, Dr. Scott had already been contacted by an attorney concerning the

treatment and the events surrounding the medical care (Petitioner's Composite

Exhibit #2). The letter to Mrs. Burns from the Division was not even mailed

until June 10, 1990 (Exhibit No. 7 to Colvin deposition, Respondent's Hearing

Exhibit A) by which time counsel had already contacted the Division. Thus, the

clear evidence is that Mrs. Burns was well aware prior to Mr. Burns' death that

the benefits would cease at death. The remainder of Finding of Fact # 20 is

accepted.

21. Adopted.

22. Adopted.

23. Adopted.

24. Adopted.

25. Adopted.

26. Adopted.

27. Adopted.

28. Adopted.

29. Adopted.

30. Adopted.

CONCLUSIONS OF LAW

31. Section 121.091(6), Florida Statutes, provides for the four different

Retirement options under the FRS. It further provides that:

"(e) The election of an option shall be null

and void if either the member, designated

beneficiary, or designated joint annuitant dies

before benefits commence."

...

"(g) 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."

32. Pursuant to the above statutory provisions, the Division has adopted

rules to implement the above provision. The rule in effect in 1990, Rule 22B-

4.002(4), Florida Administrative Code, provided as follows:

"After a retirement benefit payment has been

cashed or deposited no additional service,

which remained may be purchased and the

selection of an option may not be changed.

33. Therefore, under the above statutory and rule provisions, Mr. Burns,

having chosen Option 1, effective December 1, 1990, was entitled to receive that

benefit through the month of his death, May of 1991. At that time, the benefit

would cease by operation of law, and his surviving spouse was not entitled to a

continuing benefit.

34. In Arnow vs. Williams, 343 So2d 1309 (Fla. 1st DCA 1977), the Court

determined that retirement benefits vest at the time of retirement when the

retiree receives his first retirement warrant. (At page 1310) Under the holding

in Arnow, it is clear that when Mr. Burns received the warrant on December 31,

1990, (the last day of the month of retirement) and cashed the warrant, his

retirement was vested, and he could not change the Retirement option selected

after that date.

35. A member may change his chosen retirement option at any time up to the

cashing of the first benefit warrant. Thus, Mr. Burns could have changed the

retirement option he selected (Option 1) at any time from October 4th, when he

signed and had the retirement application notarized, until December 31, 1990,

the day he received and cashed his first retirement warrant. There can be no

doubt that Mr. Burns knew that he had selected Option 1 because he was told in

writing on several occasions that he had selected that option and a description

of the Retirement options were printed on the retirement application he signed.

In addition, there is no evidence in the record nor testimony from any of the

witnesses that Mr. Burns ever tried to change the option he selected. Certainly,

during the period from November 14th until at least December 19th, the dates he

had a total of 6 visits with Dr. Ahr, it was obvious he was feeling well or

better than he had since the operation in August 1990 and could have easily

changed his selected retirement option with a single telephone call to the

Division of Retirement. There is no evidence that he ever attempted to change

his retirement option.

36. Mr. Burns was sent a copy of Form FST-40c on October 24, 1990 (Exhibit

No. 2 to Colvin deposition, Respondent's Hearing Exhibit A), then he was sent a

second form with the benefits payable to him under each of the Retirement

options, and finally, on November 26, 1990, he was sent the notification form

acknowledging that he had chosen Option 1, together with the form OPT-FRS which

contained a very extensive and detailed explanation of the four Retirement

options available under the FRS (Exhibit No. 3 to Colvin deposition,

Respondent's Hearing Exhibit No. A). That form stated in part as follows:

Once you begin to receive your benefit, your

option selection cannot be changed. Therefore,

it is important to carefully study your

personal circumstances before making your

decision. Some of the factors affecting your

final option selection include the age and

general physical condition of both you and your

spouse, .

37. Thus, it is clear that Mr. Burns was sufficiently informed of the

differences in the various retirement options on several occasions and in

language that was not confusing, incomprehensible, or replete with legal

wording. The four Retirement options were explained to him, including the

Option 1 he selected, and he was advised to CAREFULLY consider the option he

chose. From the evidence in this case, it is clear that Mr. Burns was an

intelligent man and had graduated summa cum laude from Princeton University. He

had worked for the school system for over 26 years and was knowledgeable with

regard to his retirement rights and the options that were available to him. It

cannot reasonably be claimed that he was ignorant of either his retirement

rights or the Retirement options available to him under the FRS.

38. Petitioner argues that while this may be so, Mr. Burns was in such a

state of mind that he was not able to comprehend the nature of the Option 1

Retirement he selected. However, there is little evidence to support this

conclusion. Dr. Ahr's office notes show that Mr. Burns, by his own statements,

was getting better week by week for the six-week-period from November 14th until

December 19th. Dr. Ahr's testimony indicated that these were positive signs.

To assume that Mr. Burns was not mentally able to select a retirement option

would also mean that he probably could not even have made the decision to

retire, a suggestion that was not made by any of the witnesses. Merely because

Dr. Ahr would not have chosen the Retirement option that Mr. Burns chose, does

not mean that Mr. Burns did not know and understand what he was doing when he

selected Option 1 Retirement. Further, Dr. Ahr did not begin to treat Mr. Burns

until November 7th, over a month after he signed his retirement application.

When he was asked about his ability to testify that Mr. Burns was not competent

on October 4th, Dr. Ahr stated that he "assume(d) that his depression was as bad

or worse on October the 4th." He was asked how severe was Mr. Burns' depression

on October 4th and he stated "I don't know. On November 7 it was as severe as it

gets." He was finally asked the following question:

Q "If he (Mr. Burns) read those options, that

green form sitting in front of you, he read the

back of that, are you sitting here today saying

he didn't know what those meant and he didn't

know the implications of that when he signed

that form?

A I don't think I can say that, no. I don't

think that I can say that he didn't know."

39. Dr. Scott testified that she would have advised Mr. Burns not to have

signed the form, but she did not testify Mr. Burns did not know or understand

the options described on the form. She was asked:

Q "You are not indicating that Mr. -- or are you

indicating that Mr. Burns did not know what he

was doing when he signed his retirement form on

October 4? You're just saying that you would

not have recommended he do it?

A Right.

Q You don't know what mental condition he was in?

A (Witness shaking head)

Q In fact you don't know if he understood those

optional selection forms or not?

A Right. I mean he was just on so much medicine

that I don't think that he should have made any

important decisions."

The legal issue in this case is whether or not Mr. Burns was competent on

October 4th to make application for retirement and select his Retirement option.

The medical evidence in the record states that Mr. Burns was depressed and

should not have made any important decisions; however, it does not state that he

was incompetent or did not understand what he was doing when he filed his

retirement application on October 4, 1990.

40. As to the trembling of Mr. Burns' hands on October 4th, Dr. Scott

stated that his condition was such that it could be seen by a non-physician.

However, both Dr. Teske and Mrs. Pfund talked to Mr. Burns on October 4th and

stated that, while he looked ill, his actions and conversation seemed normal;

and, his answers were both appropriate and responsive to their conversation and

the subjects discussed. Mrs. Pfund said she had known Mr. Burns for many years

and would not have notarized his retirement application had she thought he did

not understand the nature and consequences of his actions in making application

for retirement.

41. Petitioner argues that while Mr. Burns may not have been adjudicated

legally incompetent nor have even met the required standards for such a

determination, he nevertheless did not know or understand the Retirement option

he selected. In 29 Fla Jur 2d, Incompetent Persons, s. 158, it is stated that:

A reasonable test for the purpose of

determining whether an infirmity operates to

render a person incapable of binding himself

absolutely by a contract is whether his mind

has been so effected as to render him incapable

of understanding the nature and consequences of

his acts

...

In the determination of whether a person's

mental illness or weakness is sufficient in

itself to render his contracts and conveyances

voidable, a distinction is made between actual

insanity and a weakness of the mind

unaccompanied by an infirmity overthrowing

reason. The fact that a person is physically

incapable to look after his property, or that

his mind is enfeebled because of age or

disease, is not sufficient to affect the

validity of his contract or conveyance, where

he still retains a full comprehension of the

meaning, design, and effect of his acts at the

time of its execution. However, mental

weakness, even though not amounting to

incapacity, is material where the question

arises whether a fraud has been perpetrated on,

or an undue advantage taken of, one contracting

party by the other.

There is no allegation of fraud or undue influence on the part of either the

school board or the Division of Retirement over Mr. Burns. In fact, several

opportunities were given to him to change his Retirement option in the event he

decided that he had made the wrong choice. He had almost 3 months to change his

mind and select a different option, as well as adequate information and

opportunity to change his option if he wanted to. Yet he did not make any

change nor did he even attempt to make a change. There is also no evidence that

Mr. Burns did not comprehend the various options, the meaning or the effect of

his signing the retirement application.

42. If this proceeding were a judicial proceeding in circuit court to

determine the competency of Mr. Burns, there would be no evidence that would

support such a determination. In Re Moyer, 263 So2d 286 (Fla. 1st DCA 1972); In

Re McConnell, 266 So2d 87 (Fla. 4th DCA 1972). Petitioner is attempting to

create something akin to a medical incompetency. However, this attempt must

also fail. The medical evidence does show that Mr. Burns was depressed, seemed

to be in a fog and had a difficult time accepting his medical condition.

However, it also shows that he believed that he had a successful operation in

August and that all of the cancer had been removed. His psychological state

of mind improved so much that he "felt like a million dollars" and felt the best

he had "ever since the operation"; he then "wanted to live for the sake of

living, not for his wife's sake." He believed he was getting better, and his

depression lifted after only a few sessions with Dr. Ahr.

43. Mr. Burns continued to handle the family affairs and financial affairs

for himself and his wife up until February, 1991. There is no testimony that he

made any other financial mistakes, paid any bills late, made one check out for

the wrong amount or generally messed up the family affairs or finances. Mrs.

Burns did not take over responsibility for the finances until he went back into

Roswell in February, 1991.

44. Possibly the most telling argument against Petitioner's position is

not one of law but one of logic. Neither Mrs. Burns nor any of the doctors

acted in a manner other than that Mr. Burns was able to take care of his own

medical needs or acted in any manner which could have meant that Mr. Burns was

either legally or medically incompetent during the entire time he lived! They

talked with and treated him as one who was competent! The doctors gave him

therapy, medications, treatment instructions, etc., in the same manner they

would give any competent patient, and Mr. Burns responded by making the

appropriate treatment decisions on his own, without the help of his wife or

anyone else! While he did not always follow those instructions, that failure was

not from inability to comprehend the instructions, but rather because Mr. Burns

was "very head strong" as Dr. Scott stated. It was only after he died and they

discovered the problem with the Retirement option he selected that he suddenly

was considered by them to be incompetent! The question must be asked, why

didn't they say that or treat him as incompetent while he was alive? Even on

April 17, 1991, just a few weeks before his death, Dr. Scott stated:

He is certainly alert and oriented and can make

decisions for himself. (Dr. Scott's notes of

April 17, 1991)

Now after his death they contend Mr. Burns was "unable to decide which option to

take". The evidence and the law do not support such a conclusion.

45. Where, then, is the incompetence or the weakness of mind such that Mr.

Burns did not understand either that he was applying for retirement or that he

was selecting Option 1? Simply put, there is no evidence to prove such a

conclusion and that would support a recommendation that Mr. Burns did not

understand what he was doing on October 4th when he signed his retirement

application. As Dr. Ahr stated, Mr. Burns believed that he was going to live

for many years, and he acted on that belief.

THEREFORE, based on the above and foregoing, it is

ORDERED and DIRECTED that the application of Petitioner, Lori Burns, that

the retirement option selected by Samuel Burns be declared invalid is DENIED.

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 __17th__ day of April, 1992, at Tallahassee, Leon

County, Florida.

_________________________

A.J. MCMULLIAN III

State Retirement Director

Division of Retirement

Cedars Executive Center

2639 North Monroe Street

Building C

Tallahassee, Florida 32399

[phone]

FILED WITH THE CLERK OF THE

DIVISION OF RETIREMENT, THIS

__20th__ DAY OF APRIL, 1992.

_________________________

BETTY ANN LEDFORD

CLERK

DIVISION OF RETIREMENT

Copies furnished to:

Ronald S. Fanaro

Attorney at Law

Post Office Box 2110

Vero Beach, Florida 32961

Arnold H. Pollock

Hearing Officer

Division of Administrative Hearings

1230 DeSoto Building

Tallahassee, Florida 32399

Clerk

Division of Administrative Hearings

1230 DeSoto Building

Tallahassee, Florida 32399

Stanley M. Danek

Division Attorney

Division of Retirement

Cedars Executive Center

2639 North Monroe Street

Building C

Tallahassee, Florida 32399