96-001450 Philip J. Cobb vs. Division Of Retirement Status: Closed Recommended Order on Wednesday, October 30, 1996.

Summary: Petitioner eligible to buy retirement credit service from date of suspension without pay to reinstatement date. Petitioner not required to work 30 days after reinstatement

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PHILIP J. COBB, )

)

Petitioner, )

)

vs. ) CASE NO. 96-1450

)

DIVISION OF RETIREMENT, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

A hearing was held in this case in Clearwater, Florida, on September 5,

1996, before Carolyn S. Holifield, Administrative Law Judge, Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Robert F. McKee, Esquire

Kelly and McKee, P.A.

1718 East Seventh Avenue, Suite 301

Tampa, Florida 33675-0638

For Respondent: Stanley M. Danek, Esquire

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUE

Whether Petitioner may purchase retirement credit for the period of time

from his suspension date to his reinstatement date as creditable service in the

Florida Retirement Service.

PRELIMINARY STATEMENT

By letter dated March 5, 1996, Respondent, Division of Retirement, notified

Petitioner, Philip J. Cobb, that his request for reinstatement in the Florida

Retirement System was being denied. Further, Petitioner was denied the right to

purchase, as time for creditable service, the period of time between his

suspension and reinstatement. The denial was based on the following

determinations made by Respondent: (1) no bona fide suspension and

reinstatement without compensation had occurred, and (2) the sole purpose of the

purported suspension and reinstatement was to allow Petitioner to purchase the

necessary amount of time in the Florida Retirement System to vest and become

eligible to receive retirement benefits. Petitioner challenged the denial and

timely requested a formal hearing. On or about March 25, 1996, the matter was

forwarded to the Division of Administrative Hearings and this proceeding

followed.

At the final hearing, Petitioner testified on his own behalf and presented

the testimony of William Faulkner, a Senior Assistant County Attorney with

Pinellas County. Respondent presented the testimony of Larry Hunnicutt,

Retirement Administrator, Bureau of Retirement Calculations, Division of

Retirement. Petitioner and Respondent offered and had admitted into evidence

sixteen joint exhibits. One late-filed exhibit offered by Respondent, a copy of

rules applicable in this case, was also admitted into evidence. The transcript

was filed on September 12, 1996. Both parties timely filed Proposed Findings of

Fact and Conclusions of Law.

FINDINGS OF FACT

1. Petitioner, Philip J. Cobb, was employed by the Pinellas County Board

of County Commissioners (County) in May 1985, as a property manager. As a

permanent employee of the County, Petitioner was enrolled as a member of the

regular class of the Florida Retirement System (FRS). In order to vest and be

eligible to receive retirement benefits under state law, Petitioner needed to

complete ten years of creditable service.

2. Petitioner continued to work for the County until he was terminated on

August 1, 1992. The reason Respondent terminated Petitioner was because he

allegedly failed to support his supervisor and was insubordinate.

3. At the time Petitioner's employment with the County was terminated, he

had earned approximately seven years and two months of creditable service and

was thirty-four months short of vesting in the FRS.

4. Petitioner challenged his termination by instituting legal proceedings

against the County, alleging that his termination was illegally motivated by age

discrimination. The lawsuit, Case No. 94-1054-CIV-T-21C, was filed in June

1994, in the U. S. District Court for the Middle District of Florida, Tampa

Division, and sought Petitioner's reinstatement to his former position. At the

time of his termination, Petitioner was sixty-seven years old, and at the time

of this proceeding he was one day shy of being seventy-three years old.

5. After discovery had been undertaken and prior to the case being set for

trial, the Court ordered the parties into mediation. During settlement

negotiations, the parties specifically discussed the importance of Petitioner

purchasing credit in the FRS as necessary for vesting.

6. In light of this consideration, before of the Agreement was finalized,

counsel for Petitioner contacted Respondent regarding the cost of Petitioner's

purchasing the service credit required to vest in the FRS. In a letter dated

November 30, 1995, from Maurice Helms, Chief, Bureau of Retirement Calculations,

to counsel for Petitioner, Mr. Helms noted that Petitioner had only 7.25 years

of creditable service in the FRS, not the ten years required to vest.

Nevertheless, the letter stated, "If [Petitioner] were eligible to purchase the

service credit required to vest and then retire, we estimate the cost would be

$30,273.69". This projected amount was considered in negotiations and was

represented in the settlement amount.

7. In January 1996, as a result of the mediation, Petitioner and the

County entered into a Settlement Agreement, Release and Disclaimer (Agreement),

in exchange for Petitioner's dismissing his lawsuit. Paragraph Two of the

Agreement provides that the County would make a lump sum payment distribution of

$64,000.00 to Petitioner. Of the total amount, $34,000.00 was designated as

back pay and liquidated damages. The remaining $30,00.00 was for "fees and

other costs associated with the above-captioned case." Further, the County

agreed to rescind Petitioner's termination, convert the termination to a

suspension without pay, and reinstate Petitioner to his former position.

Finally, the Agreement included a provision that Petitioner would resign from

that position on the date he was reinstated.

8. Paragraph Three of the Agreement provides that the $64,000.00 is not a

"mere recital, but is the cash consideration for this Agreement and the full and

final release affected thereby."

9. Notwithstanding the provision in the Agreement that the $34,000.00 is

for back pay and liquidated damages, Paragraph Three of the Agreement expressly

states that the settlement amount paid by the County and accepted by Petitioner

was not to compensate Petitioner for back wages, benefits, or other forms of

compensation. Rather, the settlement amount was part of the compromise to

settle and compromise the matter. In this regard, Paragraph Three of the

Agreement provides in pertinent part the following:

...The parties hereto recognize that

substantial questions of law and of fact

exist as to any possible claim or claims by

Cobb for any compensation, back pay, forms

of compensation, benefits or damages,

liquidated/compensatory or otherwise,

interest and any other claim for relief;

therefore, [this settlement is being made

purely on a compromise basis in order to

avoid further trouble, litigation and

expense, and the settlement amount is

considered to be a part of the compromise,

paid by Defendant and accepted by Cobb not

to compensate Cobb for back wages, benefits

or other forms of compensation, but to

settle and compromise the matter relative

to the trouble, interference, damage, and

expense which would have been and would

otherwise continue to be claimed and/or

associated therewith]. [Emphasis supplied.]

10. Paragraph Eleven of the Agreement addresses changes in Petitioner's

employment status and delineates the method by which the County would accomplish

these changes. That paragraph provides the following:

11. The parties hereto further agree that,

without any waiver of the sufficiency of

the grounds and cause for Cobb's termination,

and [in settlement of all claims of Cobb as

set forth hereinabove, a personnel action

form will be prepared changing Cobb's

termination action on July 31, 1992, to a

suspension without pay through the date this

Agreement is signed. Additionally, a

personnel action will be issued reinstating

Cobb to paid status effective the date this

Agreement is signed.] Cobb agrees to sign

and submit the attached letter of

resignation, effective the date he signs

this Agreement, and further agrees to waive

any pay and/or benefits to which he may be

entitled from Defendant since July 31, 1992.

[Emphasis supplied.]

11. After the Agreement was executed and pursuant to the terms thereof,

the County prepared and processed the required paperwork which effectively

rescinded Petitioner's termination, changed the termination to a suspension

without pay, and reinstated Petitioner to paid status. Petitioner did not

return to work with the County, but resigned on the day he was reinstated.

Petitioner's resignation was consistent not only with the terms of the

Agreement, but with Petitioner's intentions at the time he was being considered

for employment by the County. At or near the time Petitioner was initially

employed by the County, he indicated to County officials that he was committed

to remaining with the County for ten years so that he could vest in the FRS.

12. Based on his understanding of the Agreement, Petitioner did not intend

to return to work with the County after the Agreement was executed. Petitioner

believed that the County's action of rescinding his termination, changing his

status to suspension without pay, and reinstating him provided him with more

than the thirty-four months he needed to vest in the FRS. Had Petitioner not

been terminated by the County, he would have vested in the FRS in May 1995, and

would have thereupon retired.

13. Although the Agreement provided that Petitioner would resign, there is

no indication that the County was opposed to Petitioner's returning to work. In

fact, one of the negotiators for the County, testified that "I am not sure that

Pinellas County didn't want Mr. Cobb to return to employment. We wanted to

settle the lawsuit that was pending...."

14. After the Agreement was finalized, in a letter dated February 12,

1996, Petitioner provided Respondent with a copy of the executed Agreement and

"copies of personnel actions completed in accordance therewith." The letter

requested that Respondent do the following: (1) reinstate Petitioner in FRS in

accordance with Section 121.011(3), Florida Statutes, and Rule 60S-2.016,

Florida Administrative Code; and (2) provide Petitioner "with the amount of his

required contributions for retirement credit for his period of suspension up to

and including the date of his vesting."

15. Petitioner was prepared to pay into the State Retirement Fund the

contribution required to receive retirement credit.

16. On March 5, 1996, Respondent issued a letter to Petitioner denying him

the right to make contributions for retirement for the period of suspension

without pay, July 31, 1992, through the date of his reinstatement, January 22,

1996. The denial letter stated that the purported "reinstatement" did not

occur. As rationale for its position, Respondent found that: (1) after being

"reinstated", Petitioner never performed work in a regularly established

position and, therefore, was not compensated for services or work performed; (2)

the County never intended to reinstate Petitioner "to employment with pay, nor

was there an expectation of Petitioner to be "made whole" by the County; and (3)

Petitioner and the County never intended to "enter into an employer and employee

relationship retroactively for the period in question."

17. Respondent stated that the purported reinstatement of Petitioner "was

more in the nature of a ruse or sham to achieve a goal other than gainful

employment." Moreover, Respondent believed that "neither the member nor the

employer intended to enter into a regular employer and employee relationship."

Respondent thus concluded that the reinstatement was not "bona fide" and was

solely for the purpose of allowing Petitioner to vest in FRS and obtain

retirement benefits.

18. Respondent also objected to the form of Petitioner's reinstatement of

employment with the County, declaring that it was not a "bona fide" as signified

by his failure to receive back pay for the period of suspension and his failure

to enter into an employer-employee relationship with the County for the

equivalent of one calendar month.

19. Respondent acknowledged that once Petitioner's termination was changed

to a suspension without pay Rule 60S-2.016, Florida Administrative Code, applies

to the case. This rule is interpreted by Respondent to require that for

reinstatement to occur, an individual must work in a regularly established

position for at least one calendar month following the suspension.

20. Respondent admits that the "one calendar month" requirement is not

contained in either Section 121.011(3)(e), Florida Statutes (1991), or in Rule

60S-2.016, Florida Administrative Code, both of which govern retirement credit

for periods of suspension without pay. Nevertheless, Respondent's

interpretation of Rule 60S-2.016, Florida Administrative Code, is that a person

must work thirty days after a suspension without pay to be deemed "reinstated".

Respondent derives this interpretation by applying language from the rule that

governs granting credit for leaves of absence.

21. Respondent's interpretation of "reinstatement," as it relates to

members who have been suspended without pay, is not evident from the language of

the applicable statute or rule and may be ascertained only upon reviewing

individual member files. The Florida Retirement System currently has 600,000

active members and 140,000 retirees, for a total of 740,000 files.

CONCLUSIONS OF LAW

22. The Division of Administrative Hearings has jurisdiction over the

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

Florida Statutes.

23. Pursuant to Section 121.031(1), Florida Statutes, Respondent is

authorized to promulgate rules for the effective and efficient administration of

the Florida Retirement System.

24. Petitioner has the burden of proof in this case. See Balino v.

Department of Health, etc., 348 So.2d 349 (Fla. 1st DCA 1977). To meet the

burden of proof, Petitioner must prove by a preponderance of evidence that he

should receive retirement credit service for the period of suspension to the

date of reinstatement and that he should be allowed to pay into the Retirement

System Trust Fund the total cost of providing such retirement credit.

25. Section 121.011, Florida Statutes (1991), and Rule 60S-2.016, Florida

Administrative Code, are the applicable statutory and rule provisions governing

the instant case.

26. Section 121.011(3)(e), Florida Statutes (1991), provides in relevant

part the following:

Any member of the Florida Retirement System

or any member of an existing system under

chapter 121 on July 1, 1975, who is not

retired and who is, has been, or shall be,

suspended and reinstated without compensa-

tion shall receive retirement service credit

for the period of time from his date of

suspension to his date of reinstatement,

upon the member paying into the Retirement

System Trust Fund the total cost of providing

said retirement credit. The cost to the

members shall be the total employer

contributions plus the total employee

contributions..."

27. Rule 60S-2.016, Florida Administrative Code, provides the following:

60S-2.016 Credit for Periods of Suspension

Without Pay. A member who has been or is

suspended without compensation and later

reinstated, may receive retirement credit

for the period of suspension without

compensation by paying the required

contributions in accordance with Section

60S-3.014. A period of suspension without

compensation will not be considered a break

in service if the member elects to purchase

credit for the entire period of suspension.

28. It is a cardinal rule of statutory construction that when the language

of a statute is plain and unambiguous and conveys a clear and definite meaning,

there is no occasion for resorting to rules of statutory construction. Holly v.

Auld, 450 So. 2d 217, 219 (Fla. 1984). In such instances, the statute must be

given its plain and obvious meaning.

29. Agency rules duly promulgated under authority of law have effect of

law. State v. Jenkins, 469 So.2d 733 (Fla. 1985). There being no dispute as to

the validity of Rule 60S-2.016, Florida Administrative Code, the rule has the

force and effect of law. Thus, the same general rules of construction which

apply to statutes also govern the construction of rules.

30. The language of Section 121.011 (3)(e), Florida Statutes (1991), and

Rule 60S-2.016, Florida Administrative Code, is clear and unambiguous. The

plain meaning of the former provision is that any member of the FRS, who is not

retired, and who has been "suspended and reinstated without compensation" is

entitled to receive retirement service credit for the period of time from the

date of his suspension to the date of his reinstatement, upon such member paying

the total cost of providing the retirement credit.

31. The plain meaning of 60S-2.016, Florida Administrative Code, is that a

member of the FRS who is suspended without pay and later reinstated, is entitled

to receive retirement credit for the period of suspension without compensation

upon paying the required contributions. Also, based on the clear meaning of the

rule, if the member elects to purchase credit for the entire period of the

suspension, the period of suspension without compensation will not be considered

a break in service

32. In the instant case, Petitioner and the County negotiated and executed

a valid Agreement which resulted in the parties settling the age discrimination

lawsuit. The Agreement provided for rescission of Petitioner's termination,

with the termination being changed to a suspension without pay, and Petitioner's

immediate reinstatement to paid status. Given Petitioner's particular change in

status, clearly Rule 60S-2.016, Florida Administrative Code, entitled "Credit

for Periods of Suspension without Pay", is the appropriate rule to apply.

33. In light of the plain meaning of Rule 60S-2.016, Florida

Administrative Code, Petitioner is entitled to receive retirement credit for the

period from his date of suspension to the date of his reinstatement if he pays

the cost of providing the retirement credit. Neither the applicable statutory

nor rule provision requires an individual to work a minimum of one calendar

month after being reinstated in order to receive retirement credit. Obtaining

retirement credit when one has been suspended without pay and reinstated is

subject to and contingent only on the member's paying into the Retirement System

Trust Fund the total cost of providing the retirement credit.

34. Based on his suspension without pay and subsequent reinstatement,

Petitioner is eligible to receive retirement credit for the requisite time

period if he pays the total cost of providing the retirement credit.

35. It is well-established that an administrative interpretation of the

law being administered by an administrative agency is entitled to great

deference, but such deference is not absolute. Legal Environmental Assistance

Foundation v. Board of County Commissions, 642 So.2d 1081, (Fla. 1994). Thus an

agency's construction cannot stand when it amounts to an unreasonable

interpretation. Id at 1083-1084.

36. Respondent's interpretation of Rule 60S-2.016, Florida Administrative

Code, has been considered, but is rejected as inconsistent with and contrary to

the plain and obvious meaning of the rule. According to evidence adduced at

hearing, Respondent interprets the rule to require that an individual work at

least one month following reinstatement to be deemed reinstated for the purpose

of purchasing retirement. However, this requirement is not reflected in the

statutory or rule provisions relative to members of the FRS receiving credit for

periods of suspension without pay.

37. In construing Rule 60S-2.016, Florida Administrative Code, to impose a

"thirty day" employment requirement, Respondent has admittedly relied on

language contained in Rule 60S-2.006 (1)(c), Florida Administrative Code. Such

reliance is misplaced in view of the fact that Rule 60S-2.006, Florida

Administrative Code, entitled "Credit for Leaves of Absence Under the Florida

Retirement System", addresses a separate and distinct category. As reflected in

its title, Rule 60S-2.006, Florida Administrative Code, prescribes the criteria

for receiving credit for leaves of absence, and the language contained therein

is inapplicable to situations involving credit for periods of suspension without

pay.

38. Agencies must honor their own substantive rules until they are amended

or abrogated. Gadsden State Bank v. Gerald A. Lewis, 348 So.2d 343, (1st DCA

1977). A reading of Rule 60S-2.016, Florida Administrative Code, in no way

informs an individual in Petitioner's situation that thirty days of employment

is necessary in order for a reinstatement following a suspension without pay to

be deemed valid. Consequently, Respondent is required to implement the rule as

dictated by the plain meaning of the rule.

RECOMMENDATION

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

recommended that the Division of Retirement enter a Final Order that awards

Petitioner retirement credit for the period of time from his date of suspension

to his date of reinstatement subject to his purchasing retirement credit for

that period of time.

DONE and ENTERED this 30th day of October, 1996, in Tallahassee, Florida.

___________________________________

CARLOYN S. HOLIFIELD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone] SUNCOM 278-9675

Fax Filing (904) 921-647

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of October, 1996.

COPIES FURNISHED:

Robert F. McKee, Esquire

Kelly and McKee, P.A.

1718 East Seventh Avenue, Suite 301

Tampa, Florida 33675-0638

Stanley M. Danek, Esquire

Department of Management Services

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399

Paul A. Rowell

General Counsel

Department of Management Services

Division of Retirement

4050 Esplanade Way

Tallahassee, Florida 32399-0950

A. J. McMullian, III, Director

Department of Management Services

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the

date of this recommended order. Any exceptions to this recommended order should

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