98-003895 Kevin Sperry Hickey vs. Division Of Retirement Status: Closed Recommended Order on Tuesday, March 9, 1999.

Summary: Equitable considerations justified allowing local agency employee to belatedly effect a change in his retirement classification, retroactive to January 1, 1994.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KEVIN SPERRY HICKEY, )

)

Petitioner, )

)

vs. ) Case No. 98-3895

)

DIVISION OF RETIREMENT, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a Section 120.57(1) hearing was held in

this case on December 7, 1998, by video teleconference at sites

in Miami and Tallahassee, Florida, before Stuart M. Lerner, a

duly designated administrative law judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Larry D. Scott, Esquire

Division of Retirement

Legal Office

Cedars Executive Center

2639-C North Monroe Street

Tallahassee, Florida 32399-1560

For Respondent: Donald D. Slesnick, II, Esquire

10680 Northwest 25th Street, Suite 202

Miami, Florida 33172-2108

STATEMENT OF THE ISSUE

Whether Respondent should grant Petitioner's request that he

be reclassified (for retirement purposes) as "Special Risk

Administrative Support," effective January 1, 1994.

PRELIMINARY STATEMENT

By letter dated July 31, 1998, Respondent advised Petitioner

that it was denying Petitioner's request "to reclassify [his]

service from the Senior Management Service Class ( SMSC) to the

Special Risk Administrative Support Class ( SRASC)." Petitioner

thereafter filed a Petition contesting the denial. On

September 2, 1998, the matter was referred to the Division of

Administrative Hearings for the assignment of an administrative

law judge to conduct a Section 120.57(1) hearing.

As noted above, the hearing was held on December 7, 1998.

Five witnesses testified at the hearing: Petitioner, Mercedes

Delgado, Daniel Gonzales, R. Geoffrey Martin, and David Ragsdale.

In addition to the testimony of these five witnesses, a total of

23 exhibits (Petitioner's Exhibits A through J and Respondent's

Exhibits A through M) were offered and received into evidence.

At the conclusion of the evidentiary portion of the hearing,

the undersigned announced on the record that proposed recommended

orders had to be filed no later than February 1, 1999. By order

issued January 25, 1999, the filing deadline was extended to

February 16, 1999, at the parties' request. On February 9, 1999,

Petitioner filed an unopposed motion requesting a further

extension of the deadline. By order issued February 10, 1999,

the motion was granted and the deadline was extended to

February 26, 1999.

On February 26, 1999, Petitioner and Respondent timely filed

their proposed recommended orders. The undersigned has carefully

considered these post-hearing submittals.

FINDINGS OF FACT

Based upon the evidence adduced at hearing and the record as

a whole, the following findings of fact are made:

1. Petitioner is now, and has been since 1972, employed by

Miami- Dade County's Correction and Rehabilitation Department.

2. He began work in 1972 as a Correctional Officer.

3. He now is the Assistant Director of General

Administration.

4. In 1993, Petitioner held the position of Assistant

Director of Corrections and Rehabilitation Services (position

number 4594), and was a member of the Special Risk Administrative

Support Class within the Florida Retirement System (FRS).

5. Miami- Dade County placed notices in the September 11,

1993, and September 18, 1993, editions of the Miami Herald of its

intention to designate Petitioner's position (position number

4594) and others for inclusion in the Senior Management Service

Class of the FRS, effective January 1, 1994.

6. Thereafter, Beth Carlton, Miami- Dade County's Employee

Benefits Coordinator, issued a two-page memorandum, dated October

13, 1993, on the subject of "[c] hange in [r] etirement [c]lass

[d] esignation." The first page of the memorandum read as

follows:

A recent legislative change allows local

government employers to designate certain

positions to be included in the Senior

Management Service Class ( SMSC) of the

Florida Retirement System (FRS). As required

by statute, a notice of intent was published

and the Board of County Commissioners has

designated executive positions in groups 1

and 2 as positions to be included in the

SMSC. Effective January 1, 1994, your

position is designated as one belonging to

the SMSC. Attached is a booklet from FRS

explaining the SMSC.

Senior Management Service Class

There are essentially two differences between

the Senior Management Service Class and

Regular Class under FRS.

1. Under the SMSC you are vested after you

have completed 7 years of Senior Management

service (or 10 years of any FRS service).

You may retire without reduction in benefits

due to age if you are 62 and have 7 years of

Senior Management service, or 10 years of any

FRS service.

2. Each year of creditable Senior Management

service earns you a 2% credit. Regular

service earns 1.6% credit.

Additionally, in accordance with state

statutes, the Board of County Commissioners

has authorized the County to upgrade to SMSC

service any creditable service you may have

earned in a designated Senior Management

position since February 1, 1987. This means

that you will receive the 2% service credit

for any upgraded service. This upgrade will

take place after January 1, 1994, and will

apply only to those employees occupying

designated Senior Management positions on

January 1, 1994.

Lifetime Monthly Annuity Program

Employees in positions designated Senior

Management may instead elect to withdraw from

the Florida Retirement System altogether and

participate in a lifetime monthly annuity

program.

The second page of the memorandum read as follows:

Members of the SMSC who elect to withdraw

from FRS and participate in the annuity

program do not earn additional FRS credit

while they are in the annuity program and are

not eligible for disability benefits under

FRS. Your decision to withdraw from FRS and

participate in the annuity program is

irrevocable as long as you remain in a Senior

Management position.

Should anyone occupying a position designated

as Senior Management elect the Lifetime

Monthly Annuity Program, the County would

need to establish and fund a separate

supplemental retirement program. The County

would contribute 12.62% of the covered

compensation of any such employee to the

annuity program, and 10.45% to FRS for

unfunded actuarial accrued liability (rates

set by Florida legislature). For SMSC

participants, the County will contribute

23.63% of covered compensation.

The annuity program does not guarantee any

benefits payable on retirement, but merely

guarantees the amount of contributions and

actual investment earnings. The health

insurance subsidy is not paid for service

under the annuity program.

Next Steps

You will receive an election form from FRS.

Forms are still being developed and are not

currently available for distribution. On the

election form you will elect either to remain

in SMSC or to withdraw from FRS.

We are automatically preparing paperwork for

FRS to upgrade all eligible prior service to

SMSC and will notify you of the dates of

service that we are requesting to upgrade.

FRS will not process any upgrades until after

January 1, 1994. Upgrades for those Senior

Management employees who are planning to

retire early in 1994 will be handled first.

If you are planning to retire before June of

1994, please notify us immediately.

Once the upgrades are complete, you will be

informed of your years of creditable Regular

service and SMSC service according to FRS

records.

7. Petitioner received a copy of the first page of the

memorandum; however, he received neither a copy of the second

page of the memorandum, nor a copy of the "booklet from FRS"

referenced on the first page of the memorandum (FRS Booklet),

which explained, among other things, that, in lieu of

participating in the Senior Management Service Class, those in

the Special Risk or Special Risk Administrative Support Classes

had the option of remaining in these classes.

8. For purposes of benefits and compensation, executive

positions in Miami- Dade County government are placed in one of

three "Executive Benefit Groups" (Groups 1, 2, and 3). At the

time of the issuance of Ms. Carlton's October 13, 1993,

memorandum, Petitioner occupied a position (position 4594) in

Executive Benefit Group 2. (Earlier, in December of 1991, when

his position was reclassified to Assistant Director of

Corrections and Rehabilitation Services, a Personnel Change

Document was filled out which recommended that his position be

included in Executive Benefit Group 3 instead of Executive

Benefit Group 2. This recommendation, however, was not acted

upon.) The benefits and compensation package received by

Petitioner and the other executives in Executive Benefit Group 2

was more generous than those received by executives in Executive

Benefit Group 3 and less generous than those received by

executives in Executive Benefit Group 1.

9. In January of 1994, Andrea Romisher, Miami- Dade County's

Employee Benefits Manager, issued a memorandum, dated January 11,

1994, addressed to "Group 1 and Group 2 Executives," on the

subject of "[e] nrollment in the Senior Management Class of the

FRS." The memorandum read as follows:

You received a memorandum in October which

detailed the expansion of the Senior

Management Class of the Florida Retirement

System as of January 1, 1994. We have

received the necessary forms from the

Division of Retirement and are in the process

of formally designating executive positions

in groups 1 and 2. However, prior to our

changing your retirement class, you must

complete the enclosed FRS M-10.

To enroll in the Senior Management Service

Class:

1. Complete the top of the form;

2. Attach a copy of your Social Security

card on the form;

3. Designate a beneficiary by choosing

either section 1, 2, or 3 under the

designation of beneficiaries section;

4. Sign and date the form.

5. Return the form to the Office of Labor

Management and Employee Benefits, 111 N.W.

1st Street, Suite 2140 no later than January

21, 1994. Please direct the form to me or

Beth Carlton.

The prior memorandum also explained the

provision whereby members of the SMSC may

irrevocably elect to withdraw from the

Florida Retirement System and participate in

an optional annuity program. We have

contacted one of our providers and anticipate

having the optional annuity program available

in the near future. We have been instructed

by the Division of Retirement to enroll all

eligible executives in the SMSC in the

interim.

If you are interested in participating in the

optional annuity program, please advise

either me or Beth Carlton so that we may send

you an election form and details of the plan

when it has been finalized. Additionally,

you may elect to irrevocably withdraw from

the Florida Retirement System and participate

in the optional annuity program at any time

you occupy a position which is covered by the

SMSC.

If you have any questions, please call us at

375-5633.

Petitioner received a copy of the foregoing memorandum.

10. After reading the memorandum, Petitioner was of the

view that remaining in the Special Risk Administrative Support

Class was not an option available to him. He believed that his

only alternatives were to be in the Senior Management Service

Class, or "to withdraw from the Florida Retirement System

altogether and participate in a lifetime monthly annuity

program."

11. On February 4, 1994, Petitioner signed and dated the

following Ballot/Enrollment Form for Local Agency Employees

(Division Form SMS-3) with which he had been provided:

TO BE COMPLETED BY MEMBER:

____________ ______________________

Name Social Security Number

______________ ______________________

Position Title Position Number

DATE YOU BEGAN EMPLOYMENT IN CURRENT SMSC

POSITION: ________________________

I understand that I am in a position

designated to the Senior Management Service

Class ( SMSC) or either I am a compulsory

member of the SMSC as provided in Section

121.055(1)(b), Florida Statutes. I also

understand that in lieu of participation in

the SMSC, I may now or at a later date

withdraw from the Florida Retirement System

(FRS) and participate in a lifetime monthly

annuity program which may be provided by my

employer.

I hereby select the following:

____ I elect to remain in the Florida

Retirement System's SMSC, or

____ I elect to withdraw from the FRS and

participate in a lifetime monthly annuity

program. I understand that my decision to

withdraw from the FRS is irrevocable for as

long as I hold a position eligible for the

membership in the SMSC. I also understand

information concerning the annuity program

will need to be obtained through my employer.

__________________ ________________

Member's Signature Date

TO BE COMPLETED BY EMPLOYER:

I certify that the above member's payroll

records have been changed effective

_________ to reflect the above member's

choice of membership.

______________________________ ________

Signature of Personnel Officer Date

______________________________ _________

Name of Employing Agency Reporting

Unit

Number

12. Inasmuch as he "did not want to leave FRS," Petitioner

indicated on the form that he "elect[ ed] to remain in the Florida

Retirement System's SMSC." Had Petitioner known that he had the

option of staying in the Special Risk Administrative Support

Class, he would have elected this option instead of the one that

he selected.

13. The Miami- Dade County "Personnel Officer" who completed

the bottom portion of the form indicated thereon that

Petitioner's "pay roll records ha[d] been changed effective

1/1/94 to reflect [Petitioner's] choice of membership."

14. The completed Division Form SMS-3 was sent to the

Division of Retirement (Division).

15. The Division also received a form completed by Miami-

Dade County which reflected that Miami- Dade County had "published

notice of [its] intent to include [Petitioner's position, among

others] in the SMSC [Senior Management Service Class] in the

Miami Herald on 9/11/93 and 9/18/93," and that the position had

been so designated for inclusion in the SMSC in accordance with

the requirements of Section 121.055(3) and (7), Florida Statutes.

16. In 1997, after learning that he had to wait another

five years to retire with full benefits because of his having

been "place[d] . . . in the Senior Management Service Class" in

1994, Petitioner, by memorandum dated December 26, 1997, formally

requested Miami- Dade County's Employee Benefits Supervisor,

Daniel Gonzales, to "take the appropriate action to accomplish

[his] conversion to the [S] pecial [R] isk [A] dministrative

[S] upport [Class] for the period [he has been] included in [the]

SMSC."

17. Petitioner received the following written response to

his request:

This memo is in response to your request to

change your retirement class from the Senior

Management Service Class ( SMSC) to the

Special Risk Administrative Support Class.

In February 1994, Metro Dade designated your

position to be included in the Senior

Management Service Class. Simultaneously,

you completed a FRS-M10 Form [Designation of

Beneficiaries form] and Form SMS-3 thereby

enrolling in the SMSC. This election enabled

you to receive an increase in your annual

retirement percentage from 1.6% for Special

Risk Administrative Support Class to 2.0% for

the Senior Management Service Class. Since

1994, the Employee Benefits Office has been

working with the Florida Retirement System

(FRS) to upgrade the service time of all

executives serving in a position designated

as Executive Benefits Level 2 or higher.

Based on the elections you made in February

1994, the effective date of your SMSC service

is January 1994.

On July 3, 1997, you requested that your

service from January 1987 through December

1993, not be upgraded until you received a

decision from the FRS regarding your Special

Risk Service Class. Although you received a

determination on the Special Risk Service

Class, your memo dated December 26, 1997,

indicated that there are still some pending

issues with the FRS. Therefore, we will

continue to honor your request until all your

issues with the FRS are resolved.

In regards to changing your retirement class

to Special Risk Administrative Support, we

are unable to process your request. As

specified in the Florida Retirement System

Rules Chapter 60S-1.0057(2)(a), a member may

elect to remain in the Special Risk Class in

lieu of participating in SMSC, however such

election must be made in writing and filed

with the employer and the Division within 90

days after employment begins in a Senior

Management Service Class position. By

completing the SMSC enrollment paperwork, you

made a decision to join the Senior Management

Class. A copy of the Florida Retirement

System Rules Chapter 60S-1.0057 has been

attached for your review. Further questions

on this issue should be directed to Mr. David

Ragsdale, Division of Retirement, Bureau of

Enrollment and Contributions, 2639-C, North

Monroe Street, Tallahassee, Florida, 32399-

1560.

18. Petitioner subsequently requested the Division to

change his classification. By letter dated July 31, 1998, which

provided in pertinent part as follows, the State Retirement

Director notified Petitioner that a final decision had been made

that his request could not be granted:

This is in response to your June 8, 1998

letter requesting the Division of Retirement

reconsider its decision to reclassify your

service from the Senior Management Service

Class ( SMSC) to the Special Risk

Administrative Support Class ( SRASC).

By letter dated April 23 (copy enclosed), we

advised you of our determination that there

is no provision in the FRS law that would

allow the Division to honor your request for

reclassification.

Enclosed is a copy of Section 60S-

1.0057(2)(a)1., F.A.C. Based on the

information provided, it appears you failed

to elect to remain in the Special Risk

Administrative Support Class within the 90

day period as provided in the law. You

indicated an election to remain in the SMSC

when you executed a Ballot/Enrollment FORM

SMS-3, dated February 4, 1994 (copy

enclosed), and are consequently a compulsory

member of the SMSC. Therefore, the ruling is

now final, and if you do not agree with the

decision, you are entitled to an

Administrative Hearing.

CONCLUSIONS OF LAW

19. Section 121.055, Florida Statutes, created a Senior

Management Service Class ( SMSC) within the Florida Retirement

System (FRS), effective February 1, 1987.

20. Subsection (1)(b)1 of Section 121.055, Florida

Statutes, describes those "local agency" employees who are

included in the SMSC. It provides as follows:

(b)1. Except as provided in subparagraph 2.,

effective January 1, 1990, participation in

the Senior Management Service Class shall be

compulsory for the president of each

community college, the manager of each

participating city or county, and all

appointed district school superintendents.

Effective January 1, 1994, additional

positions may be designated for inclusion in

the Senior Management Service Class of the

Florida Retirement System, provided that:

a. Positions to be included in the class

shall be designated by the local agency

employer. Notice of intent to designate

positions for inclusion in the class shall be

published once a week for 2 consecutive weeks

in a newspaper of general circulation

published in the county or counties affected,

as provided in chapter 50.

b. One nonelective full-time position may be

designated for each local agency employer

reporting to the Division of Retirement; for

local agencies with 100 or more regularly

established positions, additional nonelective

full-time positions may be designated, not to

exceed 1 percent of the regularly established

positions within the agency.

c. Each position added to the class must be

a managerial or policymaking position filled

by an employee who is not subject to

continuing contract and serves at the

pleasure of the local agency employer without

civil service protection, and who:

(I) Heads an organizational unit; or

(II) Has responsibility to effect or

recommend personnel, budget, expenditure, or

policy decisions in his or her areas of 1

responsibility.

21. Subsection (1)(b)2 of Section 121.055, Florida

Statutes, provides that "[ i]n lieu of participation in the Senior

Management Service Class, members of the Senior Management

Service Class pursuant to the provisions of subparagraph 1. may

withdraw from the Florida Retirement System altogether and

participate in a lifetime monthly annuity program which may be

provided by the employing agency," and it further provides that

"[t]he decision to participate in such local government annuity

shall be irrevocable for as long as the employee holds a position

eligible for the annuity."

22. According to subsection (6)(c)2 of Section 121.055,

Florida Statutes:

Any employee who becomes eligible to

participate in the optional annuity program

by reason of initial employment commencing

after February 1, 1987, may, within 90 days

after the date of commencement of employment,

elect to participate in the optional annuity

program. Such election shall be made in

writing and filed with the personnel officer

of the employer. Any eligible employee who

does not within 90 days after commencement of

such employment elect to participate in the

optional annuity program shall be deemed to

have elected membership in the Senior

Management Service Class.

23. Subsection (6)(c)3 of Section 121.055, Florida

Statutes, which provides as follows, establishes another option

for employees eligible for the SMSC who are in the Special Risk

or Special Risk Administrative Support Classes:

A person who is appointed to a position in

the Senior Management Service Class and who

is a member of an existing retirement system

or the Special Risk or Special Risk

Administrative Support Classes of the Florida

Retirement System may elect to remain in such

system or class in lieu of participation in

the Senior Management Service Class or

optional annuity program. Such election

shall be made in writing and filed with the

department and the personnel officer of the

employer within 90 days of such appointment.

Any eligible employee who fails to make an

election to participate in the existing

system, the Special Risk Class of the Florida

Retirement System, the Special Risk

Administrative Support Class of the Florida

Retirement System, or the optional annuity

program shall be deemed to have elected

membership in the Senior Management Service

Class.

24. In 1994, when his position was designated for inclusion

in the SMSC, Petitioner was such an employee. At that time, he

opted to be included in the SMSC. He now claims that he should

not be bound by that election inasmuch as it was based upon

incomplete and misleading information provided to him concerning

the options he had available. According to Petitioner, under the

circumstances present in the instant case, to "bring about a fair

and just result," he "should be reinstated to [the} SRASC

[Special Risk Administrative Support Class} retroactively to

January 1, 1994." The Division, on the other hand, contends that

neither Section 121.055, Florida Statutes, nor the Division's

rules, authorize the Division to grant such relief.

25. In appropriate circumstances, principles of equity and

fairness may be applied in administrative proceedings to prevent

unjust results, notwithstanding the absence of any statutory or

rule provision expressly authorizing the application of these

principles. See Occidental Chemical Agricultural Products, Inc.

v. Department of Environmental Regulation , 501 So. 2d 674 (Fla.

1st DCA 1987) and cases cited therein 2 ("It is noteworthy that

the administrative process in this State routinely handles cases

in which parties have introduced equitable estoppel issues.");

Machules v. Department of Administration , 523 So. 2d 1132, 1133-

34 (Fla. 1988)("The doctrine of equitable tolling was developed

to permit under certain circumstances the filing of a lawsuit

that otherwise would be barred by a limitations period. . . .

The tolling doctrine is used in the interests of justice to

accommodate both a defendant's right not to be called upon to

defend a stale claim and a plaintiff's right to assert a

meritorious claim when equitable circumstances have prevented a

timely filing. Equitable tolling is a type of equitable

modification which 'focuses on the plaintiff's excusable

ignorance of the limitations period and on [the] lack of

prejudice to the defendant.' . . . [E] quitable tolling, unlike

estoppel, does not require active deception or employer

misconduct, but focuses rather on the employee with a reasonably

prudent regard for his rights. . . . 'The doctrine (of equitable

tolling) serves to ameliorate harsh results that sometimes flow

from a strict, literalistic construction and application of

administrative time limits contained in statutes and

rules.' . . . Generally, the tolling doctrine has been applied

when the plaintiff has been misled or lulled into inaction, has

in some extraordinary way been prevented from asserting his

rights, or has timely asserted his rights mistakenly in the wrong

forum. . . . We do not find it unreasonable to excuse Machules,

a layperson, from clearly understanding which avenue of review to

pursue when the Employer itself acquiesced in the procedure

chosen"; held that doctrine of equitable tolling "applied to toll

the time for seeking review [of employer's determination of

employee's abandonment of position] with the Department of

Administration.") The party urging that these equitable

principles be applied bears the burden of establishing the

appropriateness of their application. See Flanigan's

Enterprises, Inc. v. Barnett Bank of Naples , 614 So. 2d 1198,

1200 (Fla. 5th DCA 1993)("It is well established that when

estoppel is raised as a defense, the burden of proof is on the

party asserting it."); see also Balino v. Department of Health

and Rehabilitative Services , 348 So.2d 349, 350 (Fla. 1st DCA

1977), ("[T]he burden of proof, apart from statute, is on the

party asserting the affirmative issue before an administrative

tribunal.").

26. Recission of an executed instrument (such as the

Ballot/Enrollment Form for Local Agency Employees signed by

Petitioner on February 4, 1994) and restoration of the parties to

their pre-execution positions (which, together with a tolling of

the statutorily prescribed 90-day period for electing continuing

Special Risk Administrative Support Class status, is essentially

the relief Petitioner is requesting in the instant case) is an

equitable remedy that the Division may provide in those

exceptional cases where application of the rules of fair play

warrants such a remedy. Cf . Branca v. City of Miramar , 634 So.

2d 604, 606 (Fla. 1994)("The theory of estoppel is an application

of the rules of fair play."); 9 Fla. Jur.2d, Cancellation,

Recission, and Reformation of Instruments, Section 2 ("The remedy

of recission . . . is essentially equitable in character, the

granting of which depends upon the application of equitable

principles as distinguished from substantive rules of law.").

Such an exceptional situation exists where a member of the FRS,

in executing a Division-provided form or other retirement-related

instrument, has acted to his detriment based upon inaccurate or

misleading information provided by the Division (or its agent)

concerning matters about which the Division had superior

knowledge, regardless of whether there was any intent on the part

of the Division (or its agent) to deceive or mislead the

employee. Cf . Yost v. Rieve Enterprise, Inc. , 461 So. 2d 178,

182 (Fla. 1st DCA 1984)("[T]he purchaser of business property is

entitled to rely on the truth of the seller's representations

even though the falsity could have been ascertained had the buyer

made an investigation--unless the latter knew the representations

to be false, or the falsity was obvious to him--if the seller, as

owner of the property had superior knowledge of its size,

condition and income"; trial court's recission of contract

upheld); Sutton v. Cast Crete Corporation of Florida , 197 So. 2d

556, 558 (Fla. 2d DCA 1967), quoting, with approval, from Langley

v. Irons Land and Development Co. , 114 So. 769, 771 (Fla.

1927)("'According to the weight of authority, misrepresentation

of material facts, although innocently made, if acted on by the

other party to his detriment, will constitute a sufficient ground

for recission and cancellation in equity. The real inquiry is

not whether the party making the representation kn[e]w it to be

false, but whether the other party believed it to be true and was

misled by it in making the contract; and, whether the

misrepresentation is made innocently or knowingly, the effect is

the same. It is as conclusive a ground of relief in equity as a

willful and false assertion, for it operates as a surprise and

imposition on the other party.'"); 9 Fla. Jur.2d, Cancellation,

Recission, and Reformation of Instruments, Section 16 ("A

misrepresentation of material facts, although innocently made, if

acted on by the other party to that party's detriment may

constitute a sufficient ground for recission and cancellation in

equity, so long as the party making the representation had

superior knowledge and thus had reason to know of the falsity.").

27. In the instant case, Petitioner has met his burden of

establishing the existence of circumstances warranting the

equitable relief he is requesting. He has shown that he received

two memoranda from his employer (one dated October 13, 1993, and

the other dated January 11, 1994), 3 as well as a blank

Ballot/Enrollment Form for Local Agency Employees (Division Form

SMS-3), that erroneously suggested that, upon the designation of

his position to the SMSC, he had only two options--remain in the

SMSC or withdraw from the FRS entirely and participate in a

lifetime annuity program--and he could not continue his

membership in the Special Risk Administrative Support Class; 4

Petitioner reasonably relied to his detriment upon this erroneous

information (supplied by persons having superior knowledge

concerning such matters) in making his decision (reflected on the

Ballot/Enrollment Form for Local Agency Employees he filled out

and signed) to remain in the SMSC; and had he known he had the

choice of continuing his membership in the Special Risk

Administrative Support Class, he would have exercised this option

instead of the one he selected inasmuch as he wanted to be able

to retire with full benefits after 25 (rather than 30) years of

service. Moreover, it does not appear that allowing Petitioner

to change his election and permitting him to return to the

Special Risk Administrative Support Class, retroactive to

January 1, 1994 (with a concomitant recalculation of his

retirement credits) would be unlawful or contrary to public

policy.

28. Under such circumstances, Petitioner should be granted

such relief.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Division issue a final order granting

Petitioner the equitable relief described above.

DONE AND ORDERED this 9th day of March, 1999, in

Tallahassee, Leon County, Florida.

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of March, 1999.

ENDNOTES

1 See also Rule 60S-1.0057(1)(c), (g), ( i), and (j), Florida

Administrative Code, which provides as follows:

(1) Compulsory Membership -- Membership in

the Senior Management Service Class shall be

compulsory, except as provided in subsection

60S-1.0057(2), for any member of the Florida

Retirement System or an existing system who

holds any of the following positions: . . .

(c) Effective January 1, 1990 -- certain

local agency positions as follows:

1. The president of each community college;

2. The manager of each participating city or

county;

3. All appointed district school

superintendents. . . .

(g) Effective January 1, 1994 -- positions

designated for inclusion in the Senior

Management Service Class in the offices of

the state attorney and the public defender in

each judicial circuit, and in local agencies.

Such positions may be designated by each

state attorney, public defender, and local

agency employer as follows:

1. One nonelective full-time position may be

designated for each state attorney's office

and each public defender's office and for

each local agency employer.

2. Additional nonelective full-time

positions in such offices and agencies with

200 or more filled, regularly established

positions may be designated, not to exceed

0.5 percent of the filled, regularly

established positions in the office or

agency.

3. Such designated positions must meet the

following requirements:

a. The position must be managerial or

policymaking; and

b. The position must be the head of an

organizational unit, or responsible for

effecting or recommending personnel, budget,

expenditure, or policy decisions in its area

of responsibility; and

c. The position must be one in which the

employee filling the position is not subject

to continuing contract and does not have

civil service protection, that is, is subject

to termination without cause.

4. The employer designating such positions

must:

a. Publish in a newspaper of general

circulation in the county or counties

affected, once a week for 2 consecutive

weeks, a notice of intent to designate a

position or positions for inclusion in the

class; and

b. Complete Form SMSD-1, Senior Management

Service Class Designated Position Form,

adopted in 60S-9. The position number of the

designated position, consisting of from 1 to

10 numeric digits, must be included on the

Form SMS-1.

5. Inclusion of the position in the SMSC

shall be effective January 1, 1994 or, if

Form SMSD-1 is received by the Division after

February 20, 1994, the first day of the month

following the month in which Form SMSD-1 is

received by the Division.

6. Eligible employees filling designated

positions must complete and submit

application forms as provided in 60S-

1.0057(3). . . .

( i) The effective date of membership shall

be the latest of the following dates:

1. Date of inclusion of position in the

Senior Management Service Class, or

2. Date of appointment to a Senior

Management Service Class position, or

3. For members of existing systems or the

Special Risk or Special Risk Administrative

Support Classes who are eligible for the

options provided in 60S-1.0057(2), the first

day of the month during which such member

makes application for membership in the

Senior Management Service Class, or 90 days

after employment begins in a Senior

Management Service Class position for such

member who fails to elect membership in the

Senior Management Service Class within such

90-day period.

(j) Membership in the Senior Management

Service Class shall cease when a member

terminates employment in a Senior Management

Service Class position.

2 Among the cases cited were Kuge v. Department of

Administration, Division of Retirement , 449 So. 2d 389 (Fla. 3d

DCA 1984) and Salz v. Department of Administration , 432 So. 2d

1376 (Fla. 3d DCA 1983), two cases in which the Division was

deemed to be equitably estopped from denying retirement benefits

to employees who relied to their detriment upon inaccurate

information provided to them by the Division.

3 By all appearances, Petitioner's employer was assisting the

Division and acting as its agent in disseminating information to

FRS members. See Almerico v. RLI Insurance Company , 716 So. 2d

774, 777 (Fla. 1998)("Florida case law provides an insurer may be

held accountable for the actions of those whom it cloaks with

'apparent agency.' Further, a review of the case law on agency

indicates that evidence of indicia of agency may be demonstrated

if the insurer furnishes an insurance agent or agency with 'any

blank forms . . . used in soliciting, negotiating, or effecting

contracts of insurance.'"); Harris v. Department of

Administration, Division of State Employees' Insurance , 577 So.

2d 1363, 1367 (Fla. 1st DCA 1991)("In addressing appellant's

estoppel argument, we have no difficulty in agreeing with her

contention that Quincoses was acting as the division's agent when

she gave advice to appellant. The benefit document clearly

refers questions regarding coverage to the various agencies'

personnel offices, and, in doing so, the division made Quincoses

its agent."); Warren v. Department of Administration , 534 So. 2d

568, 571 (Fla. 5th DCA 1989)("In this case, the insurance policy

shows Blue Cross has a clear agency relationship with the

Department. The brochure distributed by the Department refers

all claim inquiries to Blue Cross and Blue Cross is the

administrator of the state insurance plan. Based on these facts

and Blue Cross's prior dealings with Warren, we hold Blue Cross

had the apparent authority to bind the Department.").

4 This is not a case involving the mere failure to provide any

information to an employee. Contrast with Fiorentino v.

Department of Administration, Division of Retirement , 463 So. 2d

338, 341 (Fla. 1st DCA 1985)("Appellant first argues that the

School Board had an affirmative duty to inform her of her right

to elect continued membership [in the Teachers' Retirement

System] and the consequences of a withdrawal of accumulated

contributions. Section 238.05(3) contains no such affirmative

duty"). Rather, in the instant case, information was provided to

Petitioner that was not entirely accurate. Compare with Ramel v.

Chasebrook Construction Company , 135 So. 2d 876, 882 (Fla. 2d DCA

1961)("[E] ven though a party to a transaction owes no duty to

disclose facts within his knowledge or to answer inquiries

respecting such facts, if he undertakes to do so he must disclose

the whole truth.").

COPIES FURNISHED:

Larry D. Scott, Esquire

Division of Retirement

Legal Office

Cedars Executive Center

2639-C North Monroe Street

Tallahassee, Florida 32399-1560

Donald D. Slesnick, II, Esquire

10680 Northwest 25th Street, Suite 202

Miami, Florida 33172-2108

A. J. McMullian, III, Director

Division of Retirement

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

Emily Moore, Chief Legal Counsel

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.

1 See also Rule 60S-1.0057(1)(c), (g), ( i), and (j), Florida

Administrative Code, which provides as follows:

(1) Compulsory Membership -- Membership in

the Senior Management Service Class shall be

compulsory, except as provided in subsection

60S-1.0057(2), for any member of the Florida

Retirement System or an existing system who

holds any of the following positions: . . .

(c) Effective January 1, 1990 -- certain

local agency positions as follows:

1. The president of each community college;

2. The manager of each participating city or

county;

3. All appointed district school

superintendents. . . .

(g) Effective January 1, 1994 -- positions

designated for inclusion in the Senior

Management Service Class in the offices of

the state attorney and the public defender in

each judicial circuit, and in local agencies.

Such positions may be designated by each

state attorney, public defender, and local

agency employer as follows:

1. One nonelective full-time position may be

designated for each state attorney's office

and each public defender's office and for

each local agency employer.

2. Additional nonelective full-time

positions in such offices and agencies with

200 or more filled, regularly established

positions may be designated, not to exceed

0.5 percent of the filled, regularly

established positions in the office or

agency.

3. Such designated positions must meet the

following requirements:

a. The position must be managerial or

policymaking; and

b. The position must be the head of an

organizational unit, or responsible for

effecting or recommending personnel, budget,

expenditure, or policy decisions in its area

of responsibility; and

c. The position must be one in which the

employee filling the position is not subject

to continuing contract and does not have

civil service protection, that is, is subject

to termination without cause.

4. The employer designating such positions

must:

a. Publish in a newspaper of general

circulation in the county or counties

affected, once a week for 2 consecutive

weeks, a notice of intent to designate a

position or positions for inclusion in the

class; and

b. Complete Form SMSD-1, Senior Management

Service Class Designated Position Form,

adopted in 60S-9. The position number of the

designated position, consisting of from 1 to

10 numeric digits, must be included on the

Form SMS-1.

5. Inclusion of the position in the SMSC

shall be effective January 1, 1994 or, if

Form SMSD-1 is received by the Division after

February 20, 1994, the first day of the month

following the month in which Form SMSD-1 is

received by the Division.

6. Eligible employees filling designated

positions must complete and submit

application forms as provided in 60S-

1.0057(3). . . .

( i) The effective date of membership shall

be the latest of the following dates:

1. Date of inclusion of position in the

Senior Management Service Class, or

2. Date of appointment to a Senior

Management Service Class position, or

3. For members of existing systems or the

Special Risk or Special Risk Administrative

Support Classes who are eligible for the

options provided in 60S-1.0057(2), the first

day of the month during which such member

makes application for membership in the

Senior Management Service Class, or 90 days

after employment begins in a Senior

Management Service Class position for such

member who fails to elect membership in the

Senior Management Service Class within such

90-day period.

(j) Membership in the Senior Management

Service Class shall cease when a member

terminates employment in a Senior Management

Service Class position.

2 Among the cases cited were Kuge v. Department of

Administration, Division of Retirement , 449 So. 2d 389 (Fla. 3d

DCA 1984) and Salz v. Department of Administration , 432 So. 2d

1376 (Fla. 3d DCA 1983), two cases in which the Division was

deemed to be equitably estopped from denying retirement benefits

to employees who relied to their detriment upon inaccurate

information provided to them by the Division.

3 By all appearances, Petitioner's employer was assisting the

Division and acting as its agent in disseminating information to

FRS members. See Almerico v. RLI Insurance Company , 716 So. 2d

774, 777 (Fla. 1998)("Florida case law provides an insurer may be

held accountable for the actions of those whom it cloaks with

'apparent agency.' Further, a review of the case law on agency

indicates that evidence of indicia of agency may be demonstrated

if the insurer furnishes an insurance agent or agency with 'any

blank forms . . . used in soliciting, negotiating, or effecting

contracts of insurance.'"); Harris v. Department of

Administration, Division of State Employees' Insurance , 577 So.

2d 1363, 1367 (Fla. 1st DCA 1991)("In addressing appellant's

estoppel argument, we have no difficulty in agreeing with her

contention that Quincoses was acting as the division's agent when

she gave advice to appellant. The benefit document clearly

refers questions regarding coverage to the various agencies'

personnel offices, and, in doing so, the division made Quincoses

its agent."); Warren v. Department of Administration , 534 So. 2d

568, 571 (Fla. 5th DCA 1989)("In this case, the insurance policy

shows Blue Cross has a clear agency relationship with the

Department. The brochure distributed by the Department refers

all claim inquiries to Blue Cross and Blue Cross is the

administrator of the state insurance plan. Based on these facts

and Blue Cross's prior dealings with Warren, we hold Blue Cross

had the apparent authority to bind the Department.").

4 This is not a case involving the mere failure to provide any

information to an employee. Contrast with Fiorentino v.

Department of Administration, Division of Retirement , 463 So. 2d

338, 341 (Fla. 1st DCA 1985)("Appellant first argues that the

School Board had an affirmative duty to inform her of her right

to elect continued membership [in the Teachers' Retirement

System] and the consequences of a withdrawal of accumulated

contributions. Section 238.05(3) contains no such affirmative

duty"). Rather, in the instant case, information was provided to

Petitioner that was not entirely accurate. Compare with Ramel v.

Chasebrook Construction Company , 135 So. 2d 876, 882 (Fla. 2d DCA

1961)("[E] ven though a party to a transaction owes no duty to

disclose facts within his knowledge or to answer inquiries

respecting such facts, if he undertakes to do so he must disclose

the whole truth.").