DONALD L. BALDWIN,
vs.
Respondent.
) Case No. 00-4530
Pursuant to notice, a final hearing was held in this case before Stephen F. Dean, Administrative Law Judge, Division of Administrative Hearings, on March 27, 2001. The hearing was conducted by telephone conferencing between the Tarpon Springs Work Release Center and Tallahassee, Florida.
For Petitioner: Donald L. Baldwin
D.C. No. 048444
The issues for determination are: (1) whether Petitioner owes overdue child support arrears; and (2) whether Respondent is authorized to levy Petitioner’s bank account at the MacDill Federal Credit Union, Tampa, Florida, and apply the funds to reduce or satisfy Petitioner’s past due child support obligation.
On or about August 10, 2000, Respondent, the Department of Revenue, Child Support Enforcement Program (Department), sent a Notice of Intent to Levy to Petitioner, Donald L. Baldwin (Petitioner). In the notice, the Department advised Petitioner that it intended to levy on Petitioner’s personal property, in the form of liquid assets, in the control of the MacDill Federal Credit Union, Tampa, Florida. According to the notice, the proposed action was being taken because of Petitioner’s failure to pay child support in the amount of $5,289.15. Petitioner challenged the Department’s intended action and requested an administrative hearing. On or about November 2, 2000, the Department referred the matter to the Division of Administrative Hearings to conduct the hearing.
Pursuant to Notice of Hearing by Video Teleconference (Notice) issued on February 21, 2000, the final hearing in this case was initially set for March 27, 2001, in Monticello and
Tallahassee, Florida. The hearing convened by telephonic conference at the time designated in the Notice, but Petitioner telephoned from the Tarpon Springs Work Release Center to which he had been transferred. Petitioner and Respondent’s counsel and witnesses, and the undersigned were present for the final hearing.
At the final hearing, Petitioner testified in his own behalf. Respondent presented the testimony of two witnesses, Denise Buchanan and Russell Davis, employees of the Department. Respondent offered seven exhibits into evidence, some of these admitted conditionally pending production of court-certified copies. The record was held open for 15 days, to allow the parties to supplement their exhibits. The undersigned allowed Respondent to submit court-certified copies to replace photocopied documents admitted into evidence conditionally.
Petitioner was permitted to submit, within 15 days from the hearing, a letter from the Social Security Administration concerning overpayments made to Petitioner and requesting repayment. Petitioner and Respondent timely submitted these documents which were received into evidence. Petitioner submitted a written closing argument in the form of a letter. Respondent also submitted a written closing argument, and proposed findings. The post-hearing submittals were read and considered.
On April 21, 1994, a circuit court judge in the Circuit Court, in and for Duval County, Florida (Circuit Court), issued Final Judgment determining paternity and establishing support in Case No. 94-929-FM, in the case of Loquita D. Taylor and the
State of Florida, Department of Health and Rehabilitative Services vs. Donald L. Baldwin. The Final Judgment established that Petitioner was the legal parent of Ashley Marie Taylor, born March 25, 1993, and that Petitioner owed to the State of Florida $1337.00 in public assistance. The Final Judgment ordered Petitioner to pay $35.00 per week child support through the court support depository.
In October 1998, Petitioner made one lump sum payment of $3,983.85 towards his child support.
At the hearing held December 2, 1998, in Case No. 94-929-FM, the court-appointed Hearing Officer held Petitioner “in willful indirect contempt of this Court for
failure to pay child support as ordered while having the ability to pay.” Based on the child support payment records of the court depository, the court-appointed Hearing Officer found Petitioner was “in arrears in Court ordered child support in the amount of $5,858.15 through the payment due December 2, 1998.”
On December 14, 1998, the Circuit Court adopted the Recommendations of its Hearing Officer as its order.
In paragraph 12 of those Recommendations, which became order of the Circuit Court, the Circuit Court suspended enforcement of Petitioner’s ongoing child support, so long as the minor child received Social Security on behalf of Petitioner, but ordered Petitioner “to pay $140.00 per month towards the arrearages.”
The Mandatory Addendum to the December 14, 1998, Circuit Court Order on Motion for Contempt instructed Petitioner to “immediately notify” the Clerk of the Court and the Department of Revenue, Office of Child Support Enforcement “in writing, of any change of residence or employment. Failure to receive notice of a future hearing because of a party’s failure to comply with this requirement will not be a
defense. . . ." (emphasis in original)
In 1999, according to the records of the Clerk of the Court, Petitioner made only two payments, for a combined total of $560.00, towards his December 2, 1998, arrears of $5,858.15. These two payments brought his outstanding arrears to $5,298.15. Petitioner made his last child support payment towards the arrears on May 7, 1999.
To collect the unpaid arrearages, the Department sent a Notice to Freeze to the MacDill Federal Credit Union in Tampa, Florida, on August 3, 2000. In the notice, which was sent by certified mail, the Department advised the MacDill Federal Credit Union that Petitioner had a past due and/or overdue
child-support obligation of $5,289.15 as of August 3, 2000. Moreover, the Department directed the bank not to transfer, dispose of, or return any credits, debts, or other personal property owned by or owed to Petitioner.
On August 7, 2000, the MacDill Federal Credit Union verified that it had frozen the savings account identified as belonging to Petitioner. Petitioner had $2,814.41 in his savings account.
On August 10, 2000, the Department sent a Notice of Intent to Levy by certified mail to Petitioner at his last known address. That notice provided in pertinent part the following:
You are hereby notified that pursuant to Section 409.25656, Florida Statutes, the Department of Revenue intends to levy on credits, or personal property belonging to the obligor named above [Petitioner], or debts owed to the obligor. The property consists of liquid assets and is in the control of MACDILL FCU.
This action is taken for nonpayment of child support by the obligor in the amount of
$5,289.151 as of 08/03/2000.
You are hereby notified that you may contest the agency’s action to levy on the above referenced property. You may do so by either filing an action in Circuit Court or by requesting an administrative hearing. If you wish to request an administrative hearing, you must file your petition for hearing, in writing, in accordance with the Notice of Rights attached to this Notice.
If you elect to file an action in Circuit Court, your complaint must be filed with the
Clerk of Court within twenty-one (21) days of your receipt of this notice. . . .
You may NOT request both an administrative hearing and a hearing in circuit court.
* * *
NOTICE TO A NONOBLIGOR JOINT OWNER:
If you claim you have an equal right to all of the money levied upon in a joint account, these hearing rights apply to you.
(Emphasis in original.) Attached to the Notice of Intent to Levy were a Notice of Rights form that detailed the due process rights as provided for in Section 409.25656, Florida Statutes and a copy of Rules 28-106.201 and 28-106.301, Florida Administrative Code.
On or about August 21, 2000, Petitioner timely filed an initial Petition for Formal Hearing (Petition), which requested a “formal hearing concerning the Notice of Intent to Levy.”
On or about August 21, 2000, the Department issued and sent a Notice of Extension of Freeze to the MacDill Federal Credit Union. The notice advised the bank that Petitioner had “filed an action in the circuit court or under Chapter 120, Florida Statutes, to contest the Department of Revenue’s intention to levy upon assets as specified in the Notice of Freeze.” The Department further directed the MacDill Federal Credit Union not to transfer, dispose, or return any credits,
debts or other personal property owned/controlled by Petitioner and in the bank’s possession and control. Finally, the Notice of Extension of Freeze stated that the Notice remained effective “until final resolution of the circuit court or Chapter 120 action, and the Department issued a Notice of Levy or a Notice of Full or Partial Release of Freeze.”
The Department dismissed the initial Petition without prejudice because it was not in substantial compliance with either Rule 28-106.201 or, alternatively, Rule 28-106.301, Florida Administrative Code, and allowed Petitioner an opportunity to file an amended petition.
Petitioner timely filed an amended Petition (Amended Petition), which was in substantial compliance with the Rules. On or about November 2, 2000, the Department referred the matter to the Division of Administrative Hearings to conduct the hearing.
Petitioner submitted as a late-filed exhibit a Billing Statement, dated March 7, 2001, and a Pay Stub from the Social Security Administration concerning benefits of $1,664.00 paid in error to Petitioner and requesting repayment in full either “right away” or by “smaller amount monthly over a longer period of time.” The Payment Stub that accompanied the Billing Statement indicated that the overpayment could be repaid by check, by money order, or by MasterCard, Visa, or Discover.
The statement from MacDill Federal Credit Union for October 1, 2000, through December 31, 2000, supplied by Petitioner indicates that he had a savings account balance of
$2,862.22.
Petitioner's uncontroverted testimony was that he is totally disabled, and his sole income is from Social Security. Petitioner asserted all the money in the account was from Social Security payments.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes.
The Department of Revenue is the state agency responsible for the administration of the Child Support Enforcement Program. Section 409.2557(1), Florida Statutes.
Section 409.2557(2), Florida Statutes, provides in pertinent part the following:
(2) The department in its capacity as the state Title IV-D agency shall have the authority to take actions necessary to carry out the public policy of ensuring that children are maintained from resources of their parents to the extent possible. The department's authority shall include, but not be limited to, the establishment of paternity or support obligations, as well as the modification, enforcement, and collection of support obligations.
The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue in the proceeding. Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349
(Fla. 1st DCA 1977). In this proceeding, the Department seeks to levy the overdue child support from Petitioner's bank accounts. Therefore, to prevail in this proceeding, the Department must establish by a preponderance of evidence the alleged facts necessary to show that the proposed levy is authorized by Section 409.25656, Florida Statutes. Petitioner seeks to contest the Department’s levy.
Section 409.25656, Florida Statutes, provides in pertinent part the following:
Garnishment:
If a person has a child support obligation which is subject to enforcement by the department as the state Title IV-D program, the executive director or his or her designee may give notice of past due and/or overdue support by registered mail to all persons who have in their possession or under their control any credits or personal property, including wages, belonging to the child support obligor, or owing any debts to the child support obligor at the time of receipt by them of such notice. Thereafter, any person who has been notified may not transfer or make any other disposition, up to the amount provided for in the notice, of such credits, other personal property, or debts until the executive director or his or her designee consents to a transfer or
disposition, or until 60 days after the receipt of such notice. If the obligor contests the intended levy in the circuit court or under chapter 120, the notice under this section shall remain in effect until final disposition of that circuit court or chapter 120 action. Any financial institution receiving such notice will maintain a right of setoff for any transaction involving a debit card occurring on or before the date of receipt of such notice.
Each person who is notified under this section must, within 5 days after receipt of the notice, advise the executive director or his or her designee of the credits, other personal property, or debts in their possession, under their control, or owed by them and must advise the executive director or designee within 5 days of coming into possession or control of any subsequent credits, personal property, or debts owed during the time prescribed by the notice. Any such person coming into possession or control of such subsequent credits, personal property, or debts shall not transfer or dispose of them during the time prescribed by the notice or until the department consents to a transfer.
During the last 30 days of the 60-day period set forth in subsection (1), the executive director or his or her designee may levy upon such credits, personal property, or debts. The levy must be accomplished by delivery of a notice of levy by registered mail, upon receipt of which the person possessing the credits, other personal property, or debts shall transfer them to the department or pay to the department the amount owed to the obligor.
* * *
(7)(a) Levy may be made under subsection
upon credits, other personal property, or debt of any person with respect to any past due or overdue child support obligation only after the executive director or his or her designee has notified such person in writing of the intention to make such levy.
Not less than 30 days before the day of the levy, the notice of intent to levy required under paragraph (a) must be given in person or sent by certified or registered mail to the person's last known address.
The notice required in paragraph (a) must include a brief statement that sets forth:
The provisions of this section relating to levy and sale of property;
The procedures applicable to the levy under this section;
The administrative and judicial appeals available to the obligor with respect to such levy and sale, and the procedures relating to such appeals; and
The alternatives, if any, available to the obligor which could prevent levy on the property.
* * *
(8) An obligor may contest the notice of intent to levy provided for under subsection
(7) by filing an action in circuit court. Alternatively, the obligor may file a petition under the applicable provisions of chapter 120. After an action has been initiated under chapter 120 to contest the notice of intent to levy, an action relating to the same levy may not be filed by the obligor in circuit court, and judicial review is exclusively limited to appellate review pursuant to s. 120.68. Also, after an action has been initiated in circuit court, an action may not be brought under chapter 120.
The provisions above enumerate the prerequisites that must be met prior to the Department's levying upon a person's credits, personal property, or debts. First, the Department must determine that the person has a child-support obligation that is subject to enforcement by the Department. If the Department determines that the obligor has a past due or overdue child-support obligation that is subject to enforcement by the Department, the Department must demonstrate that there has been compliance with the notice requirements enumerated in Section 409.25656, Florida Statutes.
Prior to levying upon the credits, personal property, or debts of any child-support obligor, the Department is required to give notice by registered mail to all persons known to have in their possession or under their control any credits or personal property belonging to the obligor or owing any debts to that obligor of its intent to levy. The notice should direct such person not to transfer or dispose of the credits, personal property, or debts until the Department consents to a transfer or disposition or until 60 days after receipt of the notice. Section 409.25656(1), Florida Statutes. Next, persons who receive the foregoing notice are required to advise the Department of credits or other personal property owned by the obligor, or debts owed by them to the obligor, that are in their possession or under their control. Section 409.25656(2),
Florida Statutes. Finally, prior to the Department's levying upon credits, other personal property, or debts of a child- support obligor, it must provide notice to the obligor that comports with the requirements of Section 409.25656(7), Florida Statutes.
The evidence established that Petitioner had a past due or overdue child-support obligation, subject to enforcement by the Department, of $5,298.15 in arrears. Petitioner made his most recent payment towards his court-ordered arrears on May 7,
1999.
The evidence established that the Department gave the
statutorily mandated notice to the financial institution, MacDill Federal Credit Union, that had personal property owned by Petitioner in its possession and under its control.
Additionally, the undisputed evidence showed that at the time the MacDill Federal Credit Union received the Notice of Freeze, it had in its possession and under its control, personal property owned or controlled by Petitioner. This personal property was in the form of liquid assets, specifically, funds in a savings account totaling $2,814.41.
Finally, the evidence established that the Department issued to Petitioner a Notice of Intent to Levy which (1) notified Petitioner that the Department intended to levy upon his personal property, liquid assets, in the control of the
MacDill Federal Credit Union; (2) stated that the action was being taken for Petitioner's nonpayment of overdue or past-due child support; and (3) advised Petitioner of his due process rights. This notice provided to Petitioner by the Department fully complied with the requirements of Section 409.25656 (7), Florida Statutes.
In his Amended Petition and testimony, Petitioner stated that he wished to apply the frozen funds for his own benefit to pay for, among his other personal needs, a place to live upon his release from prison.
Petitioner mentioned at the hearing for the first time, that the Social Security Administration had made a demand for repayment of benefits paid in error to him while he was incarcerated. Petitioner filed as a late-filed exhibit, a Social Security Administration Billing Statement dated March 7, 2001. The Billing Statement confirmed that Petitioner owed an overpayment of Social Security Benefits of $1,664.00 paid in error and indicated that the overpayment could be repaid by check, by money order, or by MasterCard, Visa, or Discover.
Title 42 of the United States Code, at 42 U.S.C. Sections 402(x) and 404(j), limits payments to prisoners and certain other inmates of publicly funded institutions, where an otherwise eligible person is confined for more than 30 continuous days due to the conviction of a crime. If
overpayments occur in such circumstances, then Title 42 provides procedures for the Social Security Administration to adjust or recover overpayments.
Pursuant to this section of the Social Security Act, the Social Security Administration has a number of remedies available to recoup its overpayments. It can, for example,
decrease payments temporarily to the overpaid person;
require the overpaid person to refund the excess; (3) reduce the overpaid person’s tax refunds; or (4) apply any combination of the above. See 42 U.S.C. Section 404. However, Congress has not established in 42 U.S.C. Section 404 a priority for recovery of a Social Security Administration overpayment over other interests or claims on an obligor’s financial resources.
In addition to the Billing Statement from the Social Security Administration, Petitioner supplied an account statement from MacDill Federal Credit Union for October 1, 2000, through December 31, 2000, showing a balance of $2,826.22. The origin of the funds, i.e., whether any of the funds frozen in his savings account are funds derived from the Social Security Administration, is immaterial.
Petitioner introduced evidence of a demand from Social Security Administration for repayment of overpayments made to him during his incarceration. However, this forum is without authority to adjudicate conflicting claims and Petitioner has
not noticed Social Security Administration of his inability to repay the funds because his account is frozen and requested a voluntary of the case so that these issues could be addressed by the Circuit Court. Similarly, neither Petitioner nor Respondent has noticed MacDill Federal Credit Union of the potentially conflicting claims.2
The Social Security Administration undoubtedly will recoup the money from future payments to Petitioner, whose ability to pay must be reexamined every three years by the Circuit Court. Because Petitioner's principal source of income is his social security payments, this action diminishes his future ability to repay his arrearage, and may cause the court to reduce future payments on the arrearage. In summary, the children may benefit now or later. One can only speculate regarding the impact of the lack of notice of the completing claims on the Credit Union and the Social Security Administration.
Despite Petitioner’s argument that he was not given proper notice of the Department’s intent to levy because the Department mailed its Notice by certified mail to a last known address, in satisfaction of the requirements of Section 409.25656(7)(b), Florida Statutes, instead of his then-present address, Petitioner’s timely filing of his initial Petition, less than two weeks after the Department mailed the Notice of
Intent to Levy to his last known address, is prima facie
evidence that Petitioner received the Notice of Intent to Levy.3
The Department has met its burden of proof in this proceeding. Therefore, the Department is authorized to levy on Petitioner's aforementioned savings account, and to apply those levied funds to his past due child support obligation.
RECOMMENDED that the Department of Revenue enter a final order that (1) levies such funds as available in Petitioner's savings account at the MacDill Federal Credit Union up to the amount of his arrears; (2) applies the funds to reduce Petitioner's past due child support obligation; and (3) credits Petitioner for said payment.
DONE AND ENTERED this 3rd day of May, 2001, in Tallahassee, Leon County, Florida.
STEPHEN F. DEAN
Filed with the Clerk of the Division of Administrative Hearings this 3rd day of May, 2001.
1/ The scrivener's error carried over to the new document.
2/ This case presents an unusual factual situation in which, after the notice by Respondent and election for a Chapter 120 proceeding, the Social Security Administration made demand upon Petitioner for repayment of a portion of the funds subject to levy. A sophisticated litigant might have requested this cause be dismissed and requested that proceedings be initiated in Circuit Court after notice to the Social Security Administration of the frozen assets, and notice to the Credit Union of the social security claim. Unfortunately, this did not occur which raises potential practical problems regarding future payments.
3/ The Circuit Court ordered to the Petitioner to keep the Clerk of the Court and the Department of Revenue, Office of Child Support Enforcement informed "immediately . . . in writing of any change of residence or employment." The Petitioner cannot claim a change of residence as a defense to the Department's garnishment action under Section 409.25656, Florida Statutes.
Donald L. Baldwin
D.C. Number 048444
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.
