STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROBERT CHAPIN and STUART CHAPIN, )

)

Petitioners, )

)

vs. ) Case No. 98-3543

)

DIVISION OF RETIREMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on December 1, 1998, at Tallahassee, Florida, before J. D. Parrish, a designated Administrative Law Judge of the Division of Administrative Hearings, with the Petitioner appearing by videoteleconference from Miami, Florida.

APPEARANCES

For Petitioner: Barry M. Brant, C.P.A.

Berkowitz, Dick, Pollack & Brant

One Southeast Third Avenue, Suite 150 Fifteenth Floor

Miami, Florida 33131

For Respondent: Larry D. Scott, Esquire

Division of Retirement

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

STATEMENT OF THE ISSUE

Whether the Petitioners are entitled to benefits as joint annuitants of the deceased employee.

PRELIMINARY STATEMENT

This case began on April 15, 1997, when the Division of Retirement issued a letter to Petitioners advising them that their request for benefits pursuant to Option 2 of the Florida Retirement System (FRS) was denied. Thereafter, Petitioners filed a Petition for Formal/Informal Hearing and the matter was ultimately referred to the Division of Administrative Hearings for formal proceedings on August 5, 1998.

At the hearing, Barry M. Brant, a certified public accountant, presented argument and evidence on behalf of the Petitioners. The deposition testimony of Alan Seifer, M.D., filed on December 10, 1998, was received into evidence as Petitioner's Exhibit 1. Respondent presented testimony from Pat Connolly, the Bureau Chief for the Benefit Payment Section, and its Exhibit 1 was also admitted into evidence.

A transcript of the proceeding has not been filed.

Respondent's Proposed Recommended Order filed on December 11, 1998, has been considered in the preparation of this order.

FINDINGS OF FACT

1. Petitioners are the adult, nondependent children of the deceased, Leonora Chapin.

2. Respondent is the state agency charged with the responsibility of managing the Florida Retirement System (FRS).

3. Leonora Chapin was a vested member of the FRS with over ten years of service as a teacher with the Miami Dade County School District. The exact number of years of her service was

   not established nor is it dispositive of the issues of this case.

   
   

4. In February of 1991, Ms. Chapin became extremely ill. This illness prevented her from returning to work but she did not formally retire.

5. Instead, Ms. Chapin continued as an active member of the FRS until her death, April 14, 1991.

6. At the time of her death, Ms. Chapin had designated "according to will" as her beneficiary to receive benefits, if any, which would be payable at her death. This Personal History Record form is the only record of any designation by the deceased received by the FRS.

7. Based upon the foregoing designation, the Respondent determined that the deceased's two sons would share the deceased's personal contributions to the FRS account. This amount totaled $4,305.17.

8. The Petitioners have disputed this determination and claim they are entitled to benefits as joint annuitants.

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

10. Section 121.091, Florida Statutes (1997), provides, in pertinent part:

    
    

    1. DEATH BENEFITS.–

       1. If the employment of a member is terminated by reason of his or her death

          prior to the completion of 10 years of creditable service, there shall be payable to his or her designated beneficiary the member's accumulated contributions.

       2. If the employment of an active member who may or may not have applied for retirement is terminated by reason of his or her death subsequent to the completion of

          10 years of creditable service and prior to his or her effective date of retirement, if established, it shall be assumed that the member retired as of the date of death in accordance with subsection (1) if eligible for normal retirement benefits, subsection

          1. if eligible for benefits payable for dual normal retirement, or subsection (3) if eligible for early retirement benefits. Benefits payable to the designated beneficiary shall be as follows:

             1. For a beneficiary who qualifies as a joint annuitant, the optional form of payment provided in accordance with subparagraph (6)(a)3. shall be paid for the joint annuitant's lifetime.

             2. For a beneficiary who does not qualify as a joint annuitant, no continuing monthly benefit shall be paid and the beneficiary shall be entitled only to the return of the member's personal contributions.

       3. If a retiring member dies on or after the effective date of retirement, but prior to a benefit payment being cashed or deposited, benefits shall be paid as follows:

          1. For a designated beneficiary who qualifies as a joint annuitant, benefits shall be paid in the optional form of payment provided in subparagraph (6)(a)3. for the joint annuitant's lifetime or, if the member chose the optional form of payment provided in subparagraph (6)(a)2., the joint annuitant may select the form provided in either subparagraph (6)(a)2. or subparagraph (6)(a)3.

          2. For a designated beneficiary who does not qualify as a joint annuitant, any benefits payable shall be paid as provided in the option selected by the member; or if the member has not selected an option, benefits shall be paid in the optional form of payment

          provided in subparagraph (6)(a)1. (d)1. Notwithstanding any other

          provision in this chapter to the contrary, the surviving spouse of any member killed in the line of duty may receive a monthly pension equal to one-half of the monthly salary being received by the member at the time of death for the rest of the surviving spouse's lifetime. Benefits provided by this paragraph shall supersede any other distribution that may have been provided by the member's designation of beneficiary.

          1. If the surviving spouse of a member killed in the line of duty dies, the monthly payments which would have been payable to such surviving spouse had such surviving spouse lived shall be paid for the use and benefit of such member's child or children under 18 years of age and unmarried until the 18th birthday of the member's youngest child.

          2. If a member killed in the line of duty leaves no surviving spouse but is survived by a child or children under 18 years of age, the benefits provided by subparagraph 1., normally payable to a surviving spouse, shall be paid for the use and benefit of such member's child or children under 18 years of age and unmarried until the 18th birthday of the member's youngest child.

          3. The surviving spouse of a member whose benefit terminated because of remarriage shall have the benefit reinstated beginning July 1, 1993, at an amount that would have been payable had the benefit not been terminated.

          1. The surviving spouse or other dependent of any member whose employment is terminated by death shall, upon application to the administrator, be permitted to pay the required contributions for any service performed by the member which could have been claimed by the member at the time of his or her death. Such service shall be added to the creditable service of the member and shall be used in the calculation of any benefits which may be payable to the surviving spouse or other surviving dependent.

          2. Notwithstanding any other

             provisions in this chapter to the contrary, if any member who has accumulated at least

             10 years of creditable service dies and the surviving spouse receives a refund of the accumulated contributions made to the retirement trust fund, such spouse may pay to the Division of Retirement an amount equal to the sum of the amount of the deceased member's accumulated contributions previously refunded plus interest at 4 percent compounded annually each June 30 from the date of refund until July 1, 1975, and 6.5 percent interest compounded annually thereafter, until full payment is made, and receive the monthly retirement benefit as provided in paragraph (b).

          3. The designated beneficiary who is

          the surviving spouse or other dependent of a member whose employment is terminated by death subsequent to the completion of 10 years of creditable service but prior to actual retirement may elect to receive a deferred monthly benefit as if the member had lived and had elected a deferred monthly benefit, as provided in paragraph (5)(b), calculated on the basis of the average final compensation and creditable service of the member at his or her death and the age the member would have attained on the commencement date of the deferred benefit elected by the beneficiary, paid in accordance with option 3 of paragraph (6)(a).

          (8) DESIGNATION OF BENEFICIARIES.–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 benefits shall be paid as provided in paragraph (7)(d) when death occurs in the line of duty.

11. In this case the Petitioners have failed to prove they are joint annuitants and are thereby entitled to benefits. For whatever reason, the deceased had not retired at the time of her death. Dr. Seifer's testimony as to the deceased's medical condition has not been persuasive that she was physically or mentally unable to pursue retirement prior to death. That she was gravely ill is undisputed. Nevertheless, there is no record she sought to formally retire and to designate any beneficiary other than as specified by the records maintained by the Respondent.

12. In this matter the statute must control. Accordingly, since there is no member spouse alive at the death, the living children of the member share the member's contributions. Moreover, there is nothing in this record which would suggest Petitioners meet the definition of "joint annuitant."

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division of Retirement enter a Final Order denying Petitioners' claim for benefits and returning the member's contributions in the amount of $4,305.17.

DONE AND ENTERED this 14th day of January, 1999, in Tallahassee, Leon County, Florida.

J. D. Parrish Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1999.

COPIES FURNISHED:

A. J. McMullian, III, Director Division of Retirement

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

Larry D. Scott, Esquire Division of Retirement

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

Robert Chapin

14014 Northwest Passage

Unit 240

Marina Del Ray, California 90292

Stuart Chapin

10729 Westminster Avenue

Los Angeles, California 90034

Barry M. Brant, C.P.A.

Berkowitz, Dick, Pollack & Brant, LLP One Southeast Third Avenue, Suite 150 Fifteenth Floor

Miami, Florida 33131

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.

Docket for Case No: 98-003543

Orders for Case No: 98-003543