STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JUAN C. COSTA, )

)

Petitioner, )

)

vs. ) CASE NO. 85-2263

) STATE OF FLORIDA, DEPARTMENT ) OF ADMINISTRATION, DIVISION ) OF RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to the Notice of Hearing furnished to the parties by the undersigned on August 2, 1985, a hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings, in Gainesville, Florida, on October 1, 1985. The issue for consideration at the hearing was whether the Petitioner's claim for disability retirement benefits under the Florida Retirement System should be processed.

APPEARANCES

For Petitioner: James M. Donohoe, Jr., Esquire

Post Office Box 906 Gainesville, Florida 32602

For Respondent: Stanley M. Danek, Esquire

Assistant Division Attorney Division of Retirement Cedars Executive Center 2639 North Monroe Street Suite 207 - Building C Tallahassee, Florida 32303

BACKGROUND INFORMATION

Based on Respondent's refusal to accept an application for disability benefits from Petitioner herein, Petitioner submitted

a Petition for hearing and review pursuant to Chapter 120, Florida Statutes, requesting that he be awarded disability retirement benefits both prospectively and in arrears, with interest. On July 2, 1985, Respondent forwarded the file to the Division of Administrative Hearings for the appointment of a Hearing Officer. Thereafter, on August 2, 1985, the undersigned set the hearing in this case for October 1, 1985.

At the hearing, Petitioner testified in his own behalf and introduced Petitioner's Exhibits 1 through 5. Respondent presented the testimony of Mr. David W. Ragedale, an Administrator II in the determination section, Division of Retirement and, by deposition, Waymen D. Sewell and Andrew Jackson McMullian, III. Respondent also introduced Respondent's Exhibits A and B.

The parties agree that the material facts are not in issue.

Both Petitioner and Respondent have submitted Proposed Recommended Orders which include findings of fact. The proposals of both parties are similar and are accepted and incorporated in this Recommended Order.

FINDINGS OF FACT

1. Petitioner, Dr. Juan C. Costa, is a physician who is currently retired because of a physical disability involving emphysema and arthritis. Before retiring, he- worked for a period of time as a physician at the Department of Corrections' Marion Correctional Institution near Ocala, Florida. His last day of actual work was December 15, 1984, but he remained on the payroll after that time because of vacation and sick leave time accrued. His actual termfnation date was some time in January, 1985.

   
   

2. Dr. Costa is disabled. His disability is classified as a regular disability - not "in line of duty." Feeling that the provisions of the disability and survivor benefit program of the Florida Retirement System applied to him, on March 5, 1985, he applied to the State of Florida for disability retirement. Submitted with his application were statements from his employer and two physician reports indicating that he was, in fact, disabled. His application and the supporting documents submitted therewith were prepared in accordance with the terms of a letter Dr. Costa received from the State of Florida, Division of Retirement, which told him what must be submitted.

3. In addition to the above, he also submitted a copy of a form submitted to the Social Security Administration for completion by that agency and return to the Division of Retirement which was a "Report of Confidential Social Security Benefit Information." This form, when filled out, was submitted to the Division of Retirement as support for Petitioner's application for retirement benefits. In addition to the above, Dr. Costa also submitted a letter which he received from Teresa Bender, Medical Examiner for Respondent's Disability Determination Section which indicates that it is unable to process his application because of an insufficiency of information regarding his social security credits.

   
   

4. Dr. Costa was born on May 12, 1912. When he terminated his service with the Department of Corrections, he was 72 years old. He had been receiving Social Security Retirement benefits since age 70. However, he never applied for nor received Social Security Disability Benefits and would not have been awarded them had he applied for them after attaining age 65.

   
   

5. Once an individual has reached age 65, he is no longer eligible for disability retirement benefits under the Social Security program. He may continue to earn money without limit at age 70, regardless of whether he is disabled or not. The issue of disability goes not to the issue of earnings but to the issue of the ability to work. If an individual under the age of 65, who is retired on disability benefits, goes back to work, those disability benefits may be lost. However, an individual who is disabled, but is age 70 or beyond, would not lose benefits because benefits after age 65 are based not on disability but on retirement and at age 70, the limitation on amount earned is removed.

   
   

6. His Social Security Retirement Benefits checks began arriving in January, 1983. Because of his age, he continued to work without penalty after his benefits began.

   
   

7. By deposition, Waymen D. Sewell, the District Manager for the Social Security Administration in Tallahassee, Florida indicated that the benefits received by an individual on the basis of disability will, upon that individual's reaching the age of "retirement," age 65, be converted automatically from disability benefits to retirement benefits. There will be no reduction in the amount of benefit received. The only change will be that the money forming the source of the payment will stop coming from the Disability Trust Fund and start coming from

   the Retirement Trust Fund. As far as the recipient is concerned, nothing changes.

   
   

8. There is an additional qualification for disability retirement. An individual, in order to claim and receive disability retirement under social security, in addition to being fully insured, must have 20 quarters of work credit out of the 10 year period up to the quarter in which the onset of disability was established. Here, Petitioner is retired and receiving retirement benefits from Social Security. He initially filed for retirement benefits in January of 1981 and was paid retroactively to April, 1980. At the time, he had 24 quarters of credit. Since based on his birth date, he needed 24 quarters of enrollment, he had exactly what he needed and retired at the earliest possible time.

   
   

9. Had Dr. Costa been under 65 at the time he retired, he would have needed 20 quarters within the last 10 year period prior to retirement in order to qualify for disability. According to the records on Petitioner, he did not have 20 quarters of credit during that period. The 24 quarters he had was over a period greater than 10 years and a part of it was earned after he became age 65. The quarters he earned after age

   65 did not count toward the 20 quarter retirement because once an applicant turns 65, he is paid strictly on the basis of retirement and not disability. In substance, Dr. Costa was never eligible for disability retirement under Social Security until after he became age 65 at which point he became eligible for retirement benefits which would eliminate any entitlement to disability benefits.

   
   

10. According to David Ragsdale, who works with Division of Retirement, under the Florida Retirement System statute there are two types of disability retirement (1) "in line of duty," and (2) "regular" retirement." "In line of duty" does not require more than one day service. "Regular" retirement initially required five years service prior to July 1, 1980. However, in July, 1980, the law was amended to add an alternative 10 year total service criteria as well as an exception from these criteria for those not drawing or eligible to draw Social Security disability.

    
    

11. It is the policy of the Division of Retirement, as to the Social Security exception, that if an individual can get a Social Security benefit, he cannot secure retirement benefits from the State under the Social Security exemption. This is interpreted by the Division of Retirement to mean either Social

    Security type benefit - either retirement or disability and the receipt of either one disqualifies an individual from State disability retirement eligibility under the Social Security exception.

    
    

12. Though some people receive State disability retirement while drawing Social Security benefits, they were not qualified for their State retirement under the Social Security exception. They had either worked more than five years as of July 1, 1980 or had 10 years total service.

    
    

13. Dr. Costa's application was received by the Division of Retirement, but no determination as to his qualification for disability retirement from a medical standpoint was made. His application was not accepted because, on the face of it, he did not meet the service requirement in that he had neither 5 years service by July 1, 1980, nor 10 years service overall. He was also disqualified because he was receiving a Social Security benefit, albeit the benefit was the retirement benefit and not the disability benefit.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of the proceedings.

    
    

15. Florida's law on disability retirement benefits is found in Section 121.091(4)(a), Florida Statutes, which states:

    
    

    1. Disability Retirement Date - A member who becomes totally and permanently disabled, as defined in paragraph (b), after completing 5 years of creditable service, or a member who becomes totally and permanently disabled in the line of duty regardless of service, shall be entitled to a monthly disability benefit; except that any member with less than 5 years of creditable service on July 1, 1980, or any person who becomes a member of the Florida Retirement System on or after such date must have completed 10 years of creditable service prior to becoming totally and permanently disabled in order to receive disability retirement benefits for any disability which occurs other than in the line of duty. But in the

       event that any member with less than 5 years of creditable service on July 1, 1980, becomes totally and permanently disabled after completing 5 years of creditable service and is found not to have attained fully insured status for disability benefits under the federal Social Security Act, such member shall be entitled to a monthly disability benefit . . . .

       
       

16. In other words, in order to receive regular disability benefits, an employee of the State must have completed five years of creditable service as of July 1, 1980, or 10 years total service as of the time of application, or if neither of the above can be met, be found ineligible for fully insured disability benefits under the Social Security Act.

    
    

17. Here, as of the date of termination of his employment with the State of Florida, Dr. Costa did not qualify for regular disability retirement either on the basis of 5 years service prior to July 1, 1980, or on the basis of 10 years total service. However, because he was not drawing Social Security disability benefits, he contends he comes under the Social Security exemption to the Florida Disability Retirement Benefits program since he is not drawing Social Security disability benefits because as of his initial application for Social Security benefits, he was over age 65 and could not have received disability benefits even if he were totally disabled. After age 65, all benefits are paid as retirement benefits and out of the Retirement Trust Fund.

    
    

18. The statute and the pamphlet furnished prospective applicants based on the statute make specific reference, however, to federal disability benefits as the basis for an exemption to the service requirements of the statute. The Department of Administration, Division of Retirement, as a matter of policy, has taken the position that the receipt of any Social Security benefit disqualifies the prospective recipient from regular disability benefits under the Social Security exemption to the State service requirements.

    
    

19. If it could be shown that Dr. Costa's Social Security benefits were initially based on disability and were converted solely by virtue of age to retirement benefits, there might be some issue or basis for contest of awarding him the benefits he seeks.

20. As it is, however, the statute specifically refers to disability benefits, the rule promulgated on the basis of the statute specifically refers to disability benefits (Rule 22B- 4.07(1)(b), Florida Administrative Code, and there is no showing that Dr. Costa's retirement benefits are based on his disability. The State of Florida has established its criteria and in doing so specifically delineated that the Social Security exemption is based on disability retirement. At the hearing, representatives of the State attempted to indicate that this is not really the way they intended it because their policy is otherwise. Yet, there was no showing of any basis for this policy or any reason to not comply with the terms of the statute and rule. Admittedly, an agency has wide latitude in interpreting its own rules, but in doing so, it must expose and elucidate its reasons for the position so taken by evidence of record in a judicial or administrative challenge such as here. Clearly, Respondent has failed to do that here.

    
    

21. It is impossible to state with any degree of certainty whether Dr. Costa, had he been younger, would have been eligible for a federal Social Security disability benefit. There was no evidence on that issue presented by either party. He has not, however, been evaluated by the State and this determination has not been made yet. It cannot, therefore, be said that he would have been receiving a Social Security disability benefit prior to age 65 which was thereafter converted to the retirement benefit he now receives.

    
    

22. Petitioner raised the issue of other individuals who are receiving Social Security benefits who are also receiving disability benefits under the State plan. These cases are distinguishable in that while they are drawing the Social Security benefits, these individuals' State retirement benefits are not awarded under the Social Security exemption. To the contrary, the benefits were awarded on the basis of either more than 5 years service prior to July 1, 1980, or a total of 10 years service. These cases then form no precedent for the instant case.

RECOMMENDATIONS

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

RECOMMENDED that the Respondent, Department of Administration, Division of Retirement, accept and process

Petitioner's application for regular disability retirement benefits.

RECOMMENDED this 1st day of November,1985, in Tallahassee, Florida.

ARNOLD H. POLLOCK

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 1st day of November,1985.

COPIES FURNISHED:

James M. Donohoe, Jr., Esq.

P. O. Box 906 Gainesville, FL 32602

Stanley M. Danek, Esq. Assistant Division Attorney Division of Retirement Cedars Executive Center 2639 N. Monroe Street

Suite 207 - Building C Tallahassee, FL 32303

Gilda Lambert Secretary

Department of Administration

435 Carlton Building Tallahassee, FL 32301

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

=

AGENCY FINAL ORDER

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

=

STATE OF FLORIDA DEPARTMENT OF ADMINISTRATION

DIVISION OF RETIREMENT

JUAN C. COSTA,

Petitioner,

vs. 85-2263

STATE OF FLORIDA,

DEPARTMENT OF ADMINISTRATION, DIVISION OF RETIREMENT,

Respondent.

/

FINAL ORDER

This case was presented on a petition by Juan C. Costa for review of the decision of the State Retirement Director that the application for disability retirement should not be processed because Dr. Costa is currently receiving regular social security retirement. A hearing was held pursuant to notice of October 1, 1935, before Arnold H. Pollock, designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner:

James M. Donohoe, Jr., Esquire Post Office Box 906 Gainesville, Florida 32602

For Respondent:

Stanley M. Danek, Esquire

Assistant Division Attorney Division of Retirement Cedars Executive Center 2639 North Monroe Street Tallahassee, Florida 32303

The Hearing Officer filed his Recommended Order on November 1, 1985, in which he sustained the Petitioner's assertion and concluded that the Division should accept and process his application for regular disability retirement.

The Division has reviewed and the record and has accepted rejected or modified certain findings of fact as not being based on competent, substantial evidence. Section 120.57(1)(b)9, Florida Statutes.

FINDINGS OF FACT

Because the Division is accepting certain of the Hearing Officer's Findings of Fact, rejecting others in part or in total and supplementing the findings, each Finding of Fact in the Recommended Order will be considered individually.

Paragraph 1: The evidence in the record sustained a finding of fact that Dr. Costa has a physical impairment of some degree. Such impairments are determined solely on the basis of medical evidence. On the other hand, whether a medical impairment is sufficient to constitute a disability is a legal issue based on a number of different factors. There is no evidence to prove Dr. Costa is disabled.

Paragraph 2: As stated above, there is no evidence that Dr. Costa is disabled. Under Chapter 121, Florida Statutes, the only agencies that may make such a determination are the Division of Retirement (pursuant to Section 121.091(4)(b) and (c), Florida Statutes) or the State Retirement Commission (pursuant to Section 121.23(2)(a), Florida Statutes). Neither agency has made any determination this case. Physician and employee reports do not prove that an individual is disabled.

Therefore, Dr. Costa is not totally and permanently disabled unless and until either agency makes such a determination.

Paragraph 3: Accepted

Paragraph 4: Accepted

Paragraph 5: Accepted

statutory basis to conclude that there could have been a legal issue if Dr. Costa's initial social security benefit had been a disability benefit rather than a regular retirement benefit, nor was the Division's case founded on such a premise. The Division was of the opinion that there was no right to an FRS benefit because Dr. Costa was receiving a social security benefit, regardless o. whether or not it was a regular benefit or disability benefit. We believed that to pay an FRS benefit to Dr. Costa constituted a discriminatory practice based purely upon age, i.e., a person over age 65 would qualify for the FRS benefit while a person under age 65 would not qualify. Thus, the problem case was one of de facto discrimination as well as statutory interpretation.

Paragraph 7: (unnumbered): The Division rejects that part of this paragraph (1st sentence) relating to the basis of Dr.

Costa's social security retirement. The remainder of the paragraph is accepted.

Paragraph 8: (unnumbered): Accepted

Paragraph 9: (unnumbered): Accepted Based on the foregoing Findings of fact and Conclusions of Law, it is

ORDERED that the Respondent, Department of Administration,

Division of Retirement, accept and process Petitioner's application for regular disability retirement benefits.

It is further,

ORDERED that the Division will consider and evaluate Petitioner's application for disability retirement based on the reports and information presently in its files and received from Dr. Costa. If Dr. Costa wishes the Division to consider additional information, he has ten (10) days from the date of this Order to file it with the Division.

DONE AND ORDERED this 2nd day of December 1985, in Tallahassee, Florida.

1. J. MCMULLIAN III

State Retirement Director

FILED WITH THE CLERK OF THE DIVISION OF RETIREIMENT THIS

2nd DAY OF December, 1985.

Copies Furnished:

Arnold H. Pollock Hearing Officer

Division of Administrative Hearings

The Oaklano Building, 2009 Apalachee Pky. Tallahassee, Florida 32301

Stanlev M. Danek, Esquire Assistant Division Attorney Division of Retirement Cecars Executive Center 263S North Monroe Street Tallahassee, Florida 32303

James M. Donohoe, Jr., Esguire Post Office Box 906 Gainesville, Florida 32602

Docket for Case No: 85-002263

Orders for Case No: 85-002263