99-004056 Theodore Harrell vs. Department Of Management Services, Division Of Retirement Status: Closed Recommended Order on Wednesday, March 22, 2000.

Summary: Failure of the participant to sign the change of beneficiary from under the Florida Retirement System leaves in effect the preceding, valid designation, which names his sister instead of his wife.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VERONICA N. HARRELL, widow of )

Theodore Harrell, )

)

Petitioner, )

)

vs. ) Case No. 99-4056

)

DEPARTMENT OF MANAGEMENT )

SERVICES, DIVISION OF )

RETIREMENT, )

)

Resp ondent. )

______________________________)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division of

Administrative Hearings, conducted the final hearing by

videoconference on February 18, 2000. The Administrative Law

Judge, Respondent's counsel, Respondent's witness, and the court

reporter appeared in Tallahassee, Florida. Petitioner's counsel

and Petitioner appeared in Tampa, Florida.

APPEARANCES

For Petitioner: Gregory Paules, Attorney

12421 North Florida Avenue

Tampa La w Center, Suite B-122

Tampa, Florida 33612

For Respondent: Emily Moore

Chief Legal Counsel

Department of Management Services

Division of Retirement

Cedars Executive Center, Building D

2639 North Monroe Street

Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUE

The issue is to determine who is the beneficiary to receive

benefit payments from the Florida Retirement System following the

death of Theodore Harrell.

PRELIMINARY STATEMENT

By letter dated May 18, 1999, Responden t informed Petitioner

that it was denying her benefit payments because her late husband

had designated his sister, Martha Whyte, as the beneficiary of

these payments. Petitioner requested a formal hearing.

At the hearing, Petitioner called one witness and offered

into evidence seven exhibits. Respondent called two witnesses

and offered into evidence 12 exhibits. All exhibits were

admitted.

The court reporter filed the Transcript on March 1, 2000.

FINDINGS OF FACT

1. Theodore Harrell was a member of the Florida Retirement

System receiving monthly benefit payments at the time of his

death on April 17, 1999. Respondent duly paid Mr. Harrell's

estate the benefit payment due for April 1999.

2. By letter dated May 6, 1999, Respondent informed Martha

Whyte (also known as Martha White) that she was Mr. Harrell's

designated beneficiary of the monthly payments that would

continue following Mr. Harrell's death. The letter states that

Ms. Whyte would receive a monthly benefit payment of $354.69 from

May 1, 1999, through February 28, 2005.

3. At the time of his retirement, Mr. Harrell chose Option

2 in the Florida Retirement System. Under this option,

Mr. Harrell would receive a "reduced monthly benefit payable for

[his] lifetime." If he died before receiving 120 monthly benefit

payments, his designated beneficiary would receive the monthly

benefit payments until Respondent had paid a total of 120 monthly

benefit payments.

4. In making this choice, Mr. Harrell rejected the other

three options. Option 1 is for a monthly benefit payable for his

lifetime and terminating at his death. Under this option, his

beneficiary would be entitled only to a refund of any

contributions that he made in excess of the total benefits paid.

5. If a married member of the Florida Retirement System

elects Option 1 or 2, he or she must obtain the signature of his

or her spouse to the selection. The reason is that Options 3 and

4 are, respectively, lifetime joint and survivor payments--the

difference being that, under Option 3, the payment does not

change upon the death of the first spouse, and, under Option 4,

the payment is reduced by one-third upon the death of the first

spouse.

6. In this case, Petitioner executed the spousal

acknowledgment section of the option-selection form in which

Mr. Harrell chose Option 2. Petitioner signed the acknowledgment

on May 15, 1995 - -the same date on which Mr. Harrell signed the

option-selection form.

7. On the same date, Mr. Harrell also signed a beneficiary

designation form. On this form, he designated Ms. Whyte, his

sister, as the primary and contingent beneficiary of 100 percent

of his Option 2 benefits, if any, upon his death.

8. About one year later, Mr. Harrell contacted Respondent

about changing his designated beneficiary. Respondent sent him a

new beneficiary designation form.

9. After receiving the new form, Mr. Harrell filled out his

name and Social Security number on the top of the form. However,

Petitioner filled out the part of the form for changing

beneficiaries. Petitioner printed her name as the new primary

beneficiary of 100 percent of the benefits and the daughter of

Petitioner and Mr. Harrell as the new contingent beneficiary of

100 percent of the benefits. On June 18, 1996, Petitioner, not

Mr. Harrell, then signed the beneficiary designation form and

obtained an acknowledgment of her signature. The form was then

sent to Respondent.

10. Unfortunately, Respondent failed to notice that the

June 1996 beneficiary designation form was signed by Petitioner,

rather than Mr. Harrell. Respondent only discovered the mistake

after the death of Mr. Harrell.

11. Mr. Harrell retired due to the disability of a terminal

illness. In December 1996, he changed the beneficiary on a life

insurance policy from his sister to his wife, as primary

beneficiary, and their daughter, as contingent beneficiary.

However, in October 1998, Mr. Harrell named his sister as the

primary beneficiary of another life insurance policy and

Petitioner as the contingent beneficiary of the same policy.

12. The record does not permit a reasonable inference that

Mr. Harrell intended to name Petitioner as his beneficiary on his

Florida Retirement System benefits. He obviously changed his

plans in this regard several times. He and Petitioner seemed to

have some familiarity with beneficiary designation forms, and it

is at least as likely as not that Mr. Harrell's failure to

execute the June 1996 form signaled his intent not to change the

beneficiary of his Florida Retirement System benefits. By paying

the remaining benefits to Ms. Whyte, Respondent has justifiably

honored Mr. Harrell's last, valid selection of a beneficiary.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over the subject matter. Section 120.57(1), Florida

Statutes. (All references to Sections are to Florida Statutes.

All references to Rules are to the Florida Administrative Code.)

14. Section 121.091(8)(a) provides:

Each member may, on a form provided for that

purpose, signed and filed with the division,

designate a choice of one or more persons,

named sequentially or jointly, as his or her

beneficiary who shall receive the benefits,

if any, which may be payable in the event of

the member's death pursuant to the provisions

of this chapter. If no beneficiary is named

in the manner provided above, or if no

beneficiary designated by the member survives

the member, the beneficiary shall be the

spouse of the deceased, if living. If the

member's spouse is not alive at his or her

death, the beneficiary shall be the living

children of the member. If no children

survive, the beneficiary shall be the

member's father or mother, if living;

otherwise, the beneficiary shall be the

member's estate. The beneficiary most

recently designated by a member on a form or

letter filed with the division shall be the

beneficiary entitled to any benefits payable

at the time of the member's death, except

that benefits shall be paid as provided in

paragraph (7)(d) when death occurs in the

line of duty. Notwithstanding any other

provisions in this subsection to the

contrary, for a member who dies prior to his

or her effective date of retirement on or

after January 1, 1999, the spouse at the time

of death shall be the member's beneficiary

unless such member designates a different

beneficiary as provided herein subsequent to

the member's most recent marriage.

15. Respondent has properly treated the June 1996

beneficiary designation form as a nullity because it is unsigned

by Mr. Harrell. Respondent has properly given effect to the May

1995 beneficiary designation, rather than resort to the statutory

designation of a beneficiary, because Mr. Harrell had named

Ms. Whyte as his beneficiary in a manner conforming to the

requirements of the statute. Nothing has invalidated that

selection with the formality properly required by law to protect

the right of the now-deceased Mr. Harrell to select a beneficiary

of his choice and to be assured that Respondent will honor that

choice.

RECOMMENDATION

It is

RECOMMENDED that the Department of Management Services,

Division of Retirement, enter a final order dismissing

Petitioner's claim for monthly benefits as a beneficiary of

Theodore Harrell.

DONE AND ENTERED this 22nd day of March, 2000, in

Tallahassee, Leon County, Florida.

___________________________________

ROBERT E. MEALE

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 22nd day of March, 2000.

COPIES FURNISHED:

Gregory Paules, Attorney

12421 North Florida Avenue

Tampa Law Center, Suite B-122

Tampa, Florida 33612

Emily Moore

Chief Legal Counsel

Division of Retirement

Department of Management Services

Cedars Executive Center, Building D

2639 North Monroe Street

Tallahassee, Florida 32399-1560

A. J. McMullian, III, Director

Division of Retirement

Department of Management Services

Cedars Executive Center, Building C

2639 North Monroe Street

Tallahassee, Florida 32399-1560

Paul A. Rowell, General Counsel

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-0950

Thomas D. McGurk, Secretary

Department of Management Services

4050 Esplanade Way

Tallahassee, Florida 32399-0950

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 must be filed with the agency that will

issue the final order in this case.