STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RICHARD A. CASTILLO, JR., )

)

Petitioner, )

)

vs. ) CASE NO. 94-1750

) DEPARTMENT OF MANAGEMENT SERVICES, ) DIVISION OF RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal administrative hearing was held in this case before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings, on November 22, 1994. The hearing was held by videoconference between Tampa and Tallahassee.

APPEARANCES

For Petitioner: Keith F. Roberts, Esquire

201 North MacDill Avenue Tampa, Florida 33609

For Respondent: Robert B. Button, Esquire

Department of Management Services Division of Retirement

Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUES

Whether the purported selection of Option 2 for payment of Florida Retirement System disability retirement benefits to Lon Emory Sweely, now deceased, and his beneficiary, the Petitioner, Richard A. Castillo, Jr., was valid and effective.

PRELIMINARY STATEMENT

On or about December 6, 1990, the Division of Retirement of the Florida Department of Management Services gave notice to the Petitioner, Richard A. Castillo, Jr., that it did not intend to give effect to the FRS-11o "Option Selection Form for FRS Members," which purported to choose Option 2 for payment of Florida Retirement System disability retirement benefits to Lon Emory Sweely, now deceased, and his beneficiary, the Petitioner.

On or about January 4, 1991, Castillo filed a Petition directly with the Division of Administrative Hearings (DOAH) to challenge the intended action of the Division of Retirement. DOAH sent the Petition to the Division of

Retirement for a proper referral which, for reasons not apparent from the record, was not done until April 1, 1994. Thereafter, it was assigned to a hearing officer.

Final hearing in this case initially was scheduled for June 15, 1994. However, when the Petitioner did not respond to discovery propounded by the Division of Retirement, final hearing was continued, and the parties were required to report to the hearing officer when the case was ready to be rescheduled for final hearing.

The third monthly status report indicated that the case was ready to be rescheduled for final hearing in the second or third week of November, 1994. The case was scheduled for final hearing by videoconference on November 22, 1994.

At final hearing, the Division of Retirement Motion for Official Recognition of the publication entitled "The Notary View" was granted, and the parties filed a Stipulation as to certain facts. All exhibits were stipulated into evidence: Petitioner's Exhibits 1 through 8; and Division Exhibits 1 through 9. The Petitioner called four witnesses and testified in his own behalf. The Division of Retirement called three witnesses.

Neither party ordered the preparation of a transcript of the final hearing, but they requested 30 days in which to file proposed recommended orders.

Explicit rulings on the proposed findings of fact contained in the parties' proposed recommended orders may be found in the Appendix to Recommended Order.

FINDINGS OF FACT

1. On or about June 20, 1990, Lon Emory Sweely executed a Division of Retirement Form FR-13 Florida Retirement System Application for Disability Retirement. The application indicated that Sweely's disability resulted from AIDS-related conditions. It selected Option 1, which the application designates as the "Maximum Benefit" and describes as follows:

   
   

   Full benefits payable to the member for his lifetime. If death occurs before the total benefits paid to member equals the contributions made, the difference, if any, is refunded to beneficiary in a lump sum payment.

   
   

   In so doing, Sweely rejected Option 2, which the application designates as "Ten Years Certain," and describes:

   
   

   Lifetime benefit to member, but not less than

   120 monthly payments to someone. A decreased retirement benefit payable to a member during his lifetime, and in the event of his death with a period of ten (10) years after his retirement, the same monthly amount shall be payable for the balance of such ten (10) year period to his beneficiary, or in case the beneficiary is deceased, in accordance with Section 121.091(3), Florida Statutes, as though no beneficiary has been named.

   The application, also designated the Petitioner, Richard A. Castillo, Jr., as Sweely's sole beneficiary. (Sweely previously had designated the Petitioner as his beneficiary, with the Petitioner's mother as the first contingent beneficiary, on a Division of Retirement Personal History Record Form FRS-M10 (Revised 3/89) executed by Sweely on January 25, 1990.)

   
   

2. At the time of Sweely's application for disability retirement, Sweely knew that he had full-blown AIDS and that his life expectancy would have to be estimated at approximately two years or less. There also is evidence that Eulah Lee McWilliams, the principal at the elementary school where Sweely taught, counseled Sweely on his options and advised Sweely to select the "Ten Years Certain" option. It is clear that Sweely wanted the Petitioner, and no one else, to be his sole beneficiary and to be provided for after his death in the manner and to the extent to which he decided. McWilliams believed that Sweely wanted the Petitioner to have the benefits of the "Ten Year Certain" Option 2. Based on their conversations, McWilliams believed that Sweely concurred with her recommendation in order to provide the maximum possible benefit to the Petitioner upon Sweely's death. But, in the face of Sweely's knowledge and McWilliams's advice and understanding, the application indicates that Sweely selected Option 1.

   
   

3. There was evidence that the Petitioner was present and assisting Sweely when the Form FR-13 was executed and that the Petitioner filled out part of the form at Sweely's direction, as writing was inconvenient and difficult for Sweely at the time. But there was no evidence that Sweely was unable to make informed decisions when he executed Division of Retirement Form FR-13 on or about June 20, 1990.

   
   

4. The evidence also did not prove that Sweely's choice of Option 1 was inadvertent error. At that point in time, Sweely may have wanted to be optimistic and to be able to enjoy and share with the Petitioner the maximum possible monthly benefit for as long as Sweely lived. McWilliams testified that, at the time, Sweely was trying to remain "up-beat" concerning his illness, in part thinking that this might extend his lifetime.

   
   

5. A decision to choose Option 1, contrary to McWilliams's recommendation, also would not have been inconsistent with an earlier decision by Sweely in April, 1990, (this time in conformance with McWilliams's recommendation) to postpone applying for retirement benefits until he exhausted all of his accumulated fully-paid sick leave. Had Sweely died while on sick leave, the Petitioner would not have received the additional retirement benefits he is seeking in this case. (It is not clear from the record exactly what the benefits would have been, but it seems that the Petitioner would not have been entitled to any of the additional retirement benefits he is seeking in this case. Cf. Section 121.091(7), Fla. Stat. (Supp. 1990); F.A.C. Rule 60S-4.008.)

   
   

6. A little over a month later, Sweely's condition worsened, and on or about August 14, 1990, he had to be hospitalized again (as already had happened from time to time during Sweely's full-blown AIDS.)

   
   

7. On or about August 15, 1990, the Division of Retirement approved Sweely's application for disability retirement, effective July 1, 1990. On the same date, the Division of Retirement also sent Sweely a Division of Retirement Form FST-40c (R5/89) Acknowledgement of Retirement Application and a blank FRS- 11o "Option Selection Form for FRS Members." The Form FST-40c (R5/89) requested that Sweely "review carefully how the option one and two are paid to your beneficiary." The descriptions of the options in the Form FRS-11o were somewhat

   different from those in the Form FR-13 application. Option 1 was not called the "Maximum Benefit," and it was described as follows:

   
   

   A monthly benefit payable for my lifetime. Upon my death, the monthy benefit will stop and my beneficiary will receive only a refund of any contributionss I have paid which are in

   excess of the amount I have received in benefits. This option does not provide a continuing benefit to my beneficiary.

   
   

   (Emphasis in the original.) Option 2 was not called "Ten Years Certain," and it was described as follows:

   
   

   A reduced monthly benefit payable for my lifetime. If I die before receiving 120 monthly benefit payments, my designated beneficiary will receive a monthly benefit payment in the same amount as

   I was receiving until the monthly benefit payments to both me and my beneficiary equal 120 monthly payments. No further benefits are then payable.

   
   

   The FRS-11o "Option Selection Form for FRS Members" also stated in bold and underlined upper case type: "MEMBER MUST SIGN AND DATE IN THE PRESENCE OF A NOTARY PUBLIC."

   
   

8. Whenever Sweely was hospitalized, the emotional strain on the Petitioner increased, and the time spent with Sweely in the hospital left the Petitioner less time to accomplish normal household tasks. The Petitioner's life and home usually became disorganized during Sweely's hospitalizations, and the Petitioner often allowed mail to pile up at their home at these times.

   
   

9. The Petitioner testified that, notwithstanding Sweely's hospitalization and its disruptive effect on his life and habits, he happened to collect and read the mail on August 16, 1990. He testified that among the items of mail he read that day was the envelope postmarked the day before in Tallahassee, Florida, containing the Division of Retirement Form FST-40c (R5/89) Acknowledgement of Retirement Application and the blank FRS-11o "Option Selection Form for FRS Members."

   
   

10. The Petitioner testified that he telephoned McWilliams to discuss the forms with her, and she asked him to bring them to the hospital. He testified, and she confirmed, that she met with the Petitioner at the hospital, looked at the forms, and explained them to the Petitioner. Believing, based on the conversations she had with Sweely before June 20, 1990, that Option 2 was Sweely's actual choice, McWilliams advised the Petitioner to choose Option 2.

    
    

11. McWilliams testified that she discussed the matter with Sweely and with the Petitioner in Sweely's presence on August 16, 1990. (It certainly is possible that, had they discussed the matter with Sweely on August 16, 1990, Sweely might have chosen Option 2 at that time.) But the Petitioner testified that they did not discuss the matter with Sweely on August 16, 1990. The Petitioner explained that, although Sweely was oriented and physically able to write his name and, from time to time, was mentally lucid on that day, the Petitioner did not think that Sweely was in a position to give full consideration to the matter at the time they were discussing the forms because he was on morphine, was lethargic, and was having difficulty breathing without a

    non-rebreather mask. The Petitioner also did not think it was necessary to trouble Sweely with the matter, since the Petitioner believed that the selection of Option 2 on the Form FRS-11o was redundant and also that he was authorized to execute the form for Sweely as his attorney-in-fact under a purported durable power of attorney which Sweely executed on or about February 28, 1990, authorizing the Petitoner to act in Sweely's behalf in all matters.

    
    

12. Under the circumstances on the afternoon of August 16, 1990, the Petitioner did not think that Sweely would have wanted to be troubled with the matter unnecessarily. He checked Option 2 and signed Sweely's name to the Form FRS-11o.

    
    

13. On numerous previous occasions, the Petitioner had signed Sweely's name on Sweely's personal checks to pay Sweely's bills. In doing so, the Petitioner believed that he was acting properly under the authority of the purported durable power of attorney, and the bank always honored the checks the Petitioner signed this way. But on June 13, 1990, a physician insisted that the Petitioner sign a Division of Retirement medical records release form FR-13b in his own name as attorney-in-fact for Sweely. Himself not thinking well or clearly under the circumstances, the Petitioner assumed that his signature on the Form FRS-11o was valid.

    
    

14. The Petitioner testified that it did not occur to him that there were notary services available for his use at the hospital. He testified that, after checking Option 2 and signing the Form FRS-11o, he telephoned his father, who was a notary, and asked him to come to the hospital to notarize something for him. The Petitioner's father confirmed this and also confirmed the Petitioner's testimony that they met in the hallway outside Sweely's hospital room, where the Petitioner gave his father the signed form and asked him to notarize it. Both testified that they did not discuss the form in any detail before the Petitioner returned to Sweely's hospital room. The Petitioner's father testified that he notarized the form thinking that Sweely had signed it.

    
    

15. Sweely died two days later on August 18, 1990.

    
    

    CONCLUSIONS OF LAW

    
    

16. The Petitioner has the burden of proof in this case. See Balino v. Dept. of Health, etc., 348 So. 2d 349 (Fla. 1st DCA 1977). As found, there was no evidence that Sweely was unable to make informed decisions when he executed Division of Retirement Form FR-13 on or about June 20, 1990. Nor did the evidence prove that Sweely's choice of Option 1 was inadvertent error.

    
    

17. No facts were proven upon which the Division of Retirement could be estopped from denying the Petitioner retirement benefits under Option 2. It is well established that the doctrine of equitable estoppel is to be applied against the State only rarely and in exceptional circumstances. See Dolphin Outdoor Advertising . Dept. of Transp., 582 So. 2d 709 (Fla. 1st DCA 1991); Dept. of Environmental Reg. v. C.P. Developers, 512 So. 2d 258 (Fla. 1st DCA 1987). Under Harris v. Dept. of Admin., 577 So. 2d 1363 (Fla. 1st DCA 1991), the elements of equitable estoppel against a state agency are: (1) a representation by an agent of the State as to a material fact that is contrary to a later asserted position; (2) reasonable reliance on the representation; and

    (3) a change in position detrimental to the party claiming the estoppel caused by the representation and reliance. In this case, while there was some evidence that, with respect to the language describing benefit options, the Division of Retirement considered its FRS-11o "Option Selection Form for FRS Members" to be

    an improvement over its Application for Disability Retirement Form FR-13 in use on June 20, 1990. But it cannot be said that the information on the Form FR-13 constituted a misrepresentation. See also Section 121.091(6), Fla. Stat. (Supp. 1990), which refers to Option 1 as: "The maximum retirement benefit payable to the member during his lifetime."

    
    

18. The facts now are clear that Sweely himself never chose to change from Option 1 to Option 2. Whether a change from Option 1 to Option 2 is effective depends on the validity of the Petitioner's change from Option 1 to Option 2 on Sweely's behalf.

    
    

19. For three reasons, the Petitioner's attempt to change from Option 1 to Option 2 on Sweely's behalf is invalid. First, the only durable power of attorney available under Florida law before October 1, 1990, was the durable family power of attorney, under which the donee of the power of attorney had to be the spouse, brother, sister, niece, nephew or person related to the principal by lineal consanguinity. Section 709.08, Fla. Stat. (1989); Section 24, Chapter 90-232, Laws of Florida (1990); Section 709.08, Fla. Stat. (Supp. 1990).

Second, the Petitioner did not sign the Form FRS-11o properly, i.e., in his own name, as attorney-in-fact for Sweely. Instead, he signed Sweely's name. Third, the form was not properly notarized. The Form FRS-11o requires that the member sign in the presence of a notary and have the member's signature on the form notarized. The form, together with the notarization requirement, has been approved by rule. See F.A.C. Rule 60S-9.001(2)(p). As part of a form approved by rule, the notarization requirement had the force and effect of law. Section 120.52(16), Fla. Stat. (1992). Under Section 117.09(1), Fla. Stat. (1989), a notary had to "require reasonable proof of the identity of the person whose signature is being notarized and such person must be in the presence of the notary public at the time the signature is notarized." In this case, the notary did not require reasonable proof, or even inquire, whether Sweely signed the Form FRS-11o, and Sweely was not in the notary's presence when the document was notarized.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Management Services, Division of Retirement, enter a final order: (1) that the purported selection, on the Form FRS-11o dated August 16, 1990, of Option 2 for payment of Florida Retirement System disability retirement benefits to Lon Emory Sweely, now deceased, and his beneficiary, the Petitioner, Richard A. Castillo, Jr., was invalid and ineffective; and (2) that the previous selection of Option 1 on the Form FR-13 executed on or about June 20, 1990, is valid and shall be given effect.

RECOMMENDED this 20th day of January, 1995, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 1995.

APPENDIX TO RECOMMENDED ORDER

To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1.-9. Accepted and incorporated to the extent not subordinate or unnecessary.

1. Last sentence, rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

2. Last sentence, rejected as subordinate to facts not proven and as hearsay insufficient in itself to support a finding. (Taking as true that Sweely made such a statement to the Petitioner, his actions were not in accordance with the statement.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

12.-14. Accepted and incorporated to the extent not subordinate or unnecessary.

1. Last sentence, rejected as subordinate to facts not proven and as hearsay insufficient in itself to support a finding. (Taking as true that Sweely made such a statement to McWilliams, his actions were not in accordance with the statement, and McWilliams also testified that Sweely tried to remain "up-beat," thinking that this might extend his lifetime.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. (Specifically, it was clear that Sweely wanted the Petitioner, and no one else, to be his sole beneficiary and to be provided for after his death in the manner and to the extent to which he decided.)

2. Last sentence, not proven (as to expression of "clear and unqualified acknowledgment and understanding); also rejected as subordinate to facts not proven and as hearsay insufficient in itself to support a finding. (Taking as true that Sweely made such a statement to McWilliams, his actions were not in accordance with the statement, and McWilliams also testified that Sweely tried to remain "up-beat," thinking that this might extend his lifetime.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. (Specifically, it was clear that Sweely wanted the Petitioner, and no one else, to be his sole beneficiary and to be provided for after his death in the manner and to the extent to which he decided.)

17.-30. Accepted and incorporated to the extent not subordinate or unnecessary.

31. "Substantially," rejected as not proven. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

32.-35. Accepted and incorporated to the extent not subordinate or unnecessary.

Respondent's Proposed Findings of Fact.

1.-7. Accepted and incorporated to the extent not subordinate or unnecessary.

1. Ultimate and penultimate sentences, rejected in part as contrary to facts found and to the greater weight of the evidence. (The evidence was that the Patient Care Technician Records were prepared near the beginning of each nursing shift and reflected conditions at that time. Meanwhile, there was

   evidence that the patient's mental state would "wax" and "wane." When the patient "waned" and was lethargic, it was difficult to communicate with him. Changes during the course of a shift may or may not be noted in the Progress Notes. While the Patient Care Technician Records indicate that the patient was both oriented and lethargic, the 8 a.m. progress notes indicate "lethargic at times." The progress notes also indicate that, earlier in the day, the patient had difficulty breathing without the non-rebreather mask and that, by 2 p.m., he was wearing the mask continuously. Even disregarding the possibility that the morphine dosage was enough to affect his judgment, the patient's lethargy and his difficulty breathing without the mask probably would have made it difficult for him to communicate on legal matters on the afternoon of August 16, 1990.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

2. Ultimate and penultimate sentences, rejected in part as contrary to facts found and to the greater weight of the evidence. (He did not allege that Sweely could not communicate or write his name. He testified that he did not think Sweely would have been able to think clearly or want to be troubled with the form unnecessarily. He did not think he had to discuss it with Sweely or have Sweely sign it.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

3. Accepted and incorporated to the extent not subordinate or unnecessary. However, Dr. Breen's curt medical evaluation of Sweely's general medical condition on August 16, 1990, was not for the purpose of evaluating whether it was possible or prudent to have him considering legal documents and making important legal judgments. In addition, Dr. Breen saw the patient early in the morning and would not have seen changes during the course of the day.

11.-12. Accepted and incorporated to the extent not subordinate or unnecessary.

13. Rejected as contrary to the greater weight of the evidence that Castillo, Jr., "insist[ed] that Sweely was incompetent, unable to provide or receive meaningful communication on August 16--and could not execute the form himself . . .." (Rather, he testified that he did not think Sweely would have been able to think clearly or want to be troubled with the form unnecessarily.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary.

14.-16. Accepted and incorporated to the extent not subordinate or unnecessary.

COPIES FURNISHED:

Keith F. Roberts, Esquire

201 North MacDill Avenue Tampa, Florida 33609

Robert B. Button, Esquire Department of Management Services Division of Retirement

Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

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

William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307

Koger Executive Center 2737 Centerview Drive

Tallahassee, Florida 32399-0950

Paul A. Rowell, Esquire General Counsel

Department of Management Services Knight Building, Suite 312

Koger Executive Center 2737 Centerview Drive

Tallahassee, Florida 32399-0950

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the Department of Management Services, Division of Retirement, written exceptions to this Recommended Order. All agencies allow each party at least ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the Department of Management Services, Division of Retirement concerning its rules on the deadline for filing exceptions to this Recommended Order.

Docket for Case No: 94-001750

Orders for Case No: 94-001750