STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GEORGE FROST, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1348

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

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on October 3, 1983, at Tallahassee, Florida.

APPEARANCES

For Petitioner: Ronald C. LaFace, Esquire

Post Office Drawer 1838 Tallahassee, Florida 32302

For Respondent: Augustus D. Aikens, Jr., Esquire

Cedars Executive Center Suite 207C, Box 81

2639 North Monroe Street Tallahassee, Florida 32303

By Petition dated April 27, 1983, George Frost, Petitioner, seeks to have his retirement pay as a member of the State and County Officers and Employees Retirement System (SCOERS) computed as a member of Division A which provides retirement pay computed at two percent (2 percent) of salary multiplied by each year of service rather than as a member of Division B which computes retirement pay at one and one-half percent (1.5 percent) of salary times years of service. As grounds therefor it is alleged that when state employees under SCOERS were afforded the option of social security coverage in 1958 their election for such coverage was required in writing and that Petitioner made no such election in writing. Accordingly, his change from Division A to Division B, which required an election in writing by the employee, was invalid and he should be credited with retired pay as a member of Division A. The only fact in dispute in these proceedings is whether Petitioner made an election in writing to change from Division A to Division B so as to receive social security coverage.

Petitioner called two witnesses, included Petitioner, Respondent called one witness, and five exhibits were admitted into evidence.

The parties' proposed findings, to the extent they are incorporated herein, are adopted; otherwise, they are rejected as not supported by the evidence or unnecessary to the results reached.

FINDINGS OF FACT

1. Petitioner was employed by Palm Beach County from 1954 to 1968 as Assistant County Engineer and County Engineer. During this period he was a member of SCOERS, had deductions taken from his salary for retirement, and became eligible for full retirement based on years of service when he reached the age of 60 in April, 1983.

   
   

2. From 1954 to 1956 six percent (6 percent) [5 percent prior to July 1, 1955] was deducted from Petitioner's salary as his retirement contributions pursuant to the retirement plan in effect for state and county officers and employees.

   
   

3. In 1957 the Legislature amended Chapter 122, Florida Statutes, by providing social security coverage for state and county employees electing to be so covered. All groups of employees, including SCOERS employees, were divided into Division A and Division B. Those in Division B were those who made an election in writing to have their retirement deductions changed from six percent (6 percent) to four percent (4 percent) to have FICA deductions withheld from their salaries, and to be covered by the Social Security System. Those not so electing remained in Division A, their employment was not covered by social security, and their retirement deduction was six percent (6 percent).

   
   

4. As a county employee any election Petitioner made to convert from Division A to Division B would have been made to Palm Beach County, who provided the names of those so electing to the Comptroller's Office, who in 1958 handled the retirement files for the state. No list of names submitted by the counties has been retained by the state. Palm Beach County does not maintain active personnel files for retired people and had no personnel records for Petitioner in the dead files. Accordingly, at the time of the hearing Palm Beach County had no written election from Petitioner to change from Division A to Division B.

   
   

5. When the employees in these SCOERs system elected to change to social security coverage in 1957 or 1958, part of the sum they had contributed to their state retirement was transferred to the Social Security Administration to make their entry into social security retroactive to January 1, 1956. The maximum that was transferred to the Social Security Administration for any one member of SCOERS so electing was $178.50. This amount was transferred from Petitioner's retirement account to the Social Security Administration in 1958.

   
   

6. Effective January 1, 1956, Petitioner's contribution to SCOERS was calculated at four percent (4 percent) of his salary and this amount was deducted monthly until his employment with Palm Beach County ended in 1968. During the period Petitioner was employed by Palm Beach County he contributed to this retirement fund at the rate of six percent (6 percent) for 1.17 years and at the rate of four percent (4 percent) for12.91 years. From 1958 through 1962 annual statements were submitted to SCOERS members showing the contributions to and the status of their retirement accounts. In 1963 such a statement was provided on July 1, 1963. Thereafter, the statements were submitted on a fiscal year basis.

   
   

7. At no time did Petitioner protest the FICA deductions from his salary or question the percentage deducted from his pay for the retirement fund.

   Petitioner now contends that he did not pay any attention to the deductions from his salary to the retirement fund and was unaware that social security deductions were being taken. This contention is not consistent with Petitioner's testimony that he is a fiscal conservative nor with his background as an engineer.

   
   

8. In addition to the referendum made available to employees under the SCOERS in 1957 to elect to be covered by social security the Legislature subsequently established other referendums in 1959 and again in the 1960s providing members of SCOERS other opportunities to elect social security coverage. On December 1, 1970, the Florida Retirement System was started and membership in the old Florida retirement systems, including SCOERS, was closed. All members of the Florida Retirement System are covered by social security. Of the approximately ten thousand employees not in the Florida Retirement System, i.e., still in SCOERS, teachers and law enforcement retirement systems, less than one hundred remain in Division A and are not covered by social security.

   
   

9. A special Statute of Limitations bars actions to modify contributions to the Social Security System three years three months and fifteen days after the contributions are made. Accordingly, Petitioner's coverage under social security from 1956 to 1968 is irrevocable.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. Section 122.24, Florida Statutes (1957) , which is applicable to this case, provides:

    
    

    Membership in division B.--Officers

    and employees, within the contemplation of this system, may become members of division B of this system in the manner and under circumstances as follows:

    1. An officer or employee who is

       a member of this system on June 19, 1957 or who becomes such a member after

       June 19, 1957, and prior to execution

       of the agreement in pursuance of affirma- tive referendum as hereinafter provided, may transfer to this division by elect- ing to do so in writing filed with the administrator. While membership in this division shall date from the filing of such election with the administrator,

       for the purposes of contributions to the system and benefits to members under this division, membership in this division shall take effect upon the date of execu- tion of the agreement. A form for the election to transfer to this division shall be prescribed and furnished to the

       members of this system by the administrator. Such form shall prescribe-the date by which the executed election must be returned

       by the members in order for such members to be eligible for participation in the

       referendum provided in Section 122.25. Executed

       elections received after such date shall be effective for transfer of membership to this division if returned prior to the date the agreement is entered into. Pro- vided further, that any member electing to belong to division B may withdraw

       there from prior to the date the agreement is entered into.

    2. A person who becomes a member of this system after execution of the agreement shall become a member of division B of the system.

       
       

11. Petitioner's primary contention appears to be that the Respondent has failed to produce a written request by Petitioner to transfer to Division B as is required by the statutes; therefore, he remained in Division A and is now entitled to have his retirement benefits calculated using two percent (2 percent) per year of service rather than one and one-half percent (1.5 percent)

    ,as contended by Respondent.

    
    

12. Petitioner has the burden of proof that he is entitled to the benefits claimed. Balino v. DHRS, 348 So.2d 349 (Fla. 1st DCA 1977). By Petitioner testifying that, to the best of his recollection he never submitted such an election in writing, the burden shifts to the Respondent to come forward with evidence to overcome the prima facie effects of Petitioner's testimony. By showing that no personnel records covering Petitioner's employment with Palm Beach County is extant, it becomes clear that no document of election can be produced to refute Petitioner's testimony. Neither party can produce positive evidence of the ultimate fact in dispute. Petitioner has no direct evidence to prove the negative and Respondent has no personnel file in which such an election would be kept if made. We are therefore reduced to drawing inferences or presumptions from the facts that were presented. The significant facts in this regard are that effective January 1, 1956, the deductions from Petitioner's pay for retirement were reduced from six percent (6 percent) to four percent (4 percent) ; social security deductions were also taken from Petitioner's salary; these deductions, if not shown on the statement given to Petitioner with each paycheck, were provided to Petitioner in an annual statement showing his salary and deductions; and Petitioner made no objection or protest to these deductions.

    
    

13. The presumption that every official will perform the duties imposed on him is applicable to state and county officials. These statutes above quoted imposed upon these officials the duty of notifying their employees of the referendum by which they could voice their desire to become covered by the Social Security System and to properly act upon elections made by these employees to belong to Division B.

    
    

14. The presumption that a public officer performs his duties finds expression in the rule that action taken by him which presupposes the existence of other facts to make them legally operative is presumptive proof of the existence of the latter. 23 Fla.Jur. 2d Section 93, Evidence and Witnesses.

    
    

15. Applying this principle to the facts here involved leads to the presumption that Palm Beach County received an election from Petitioner to transfer to Division B and as a result of that election changed his deductions for retirement from six percent (6 percent) to four percent (4 percent) and commenced deductions for social security coverage. The fact is that they reported these changes and submitted the lesser of retirement deductions to the

    component of state government administering SCOERS, and thereafter Petitioner was treated as a member of Division B while employed by Palm Beach County.

    
    

16. Respondent contends that Petitioner is precluded from succeeding in these proceedings by the doctrine of equitable estoppel. While some of the elements of estoppel are present, the principal element, viz., that Petitioner never submitted an election to transfer to Division B, is not an established fact as noted above. Had this fact been established, the invoking of equitable estoppel may be an appropriate remedy to estop Petitioner from asserting this fact. Estoppel is a doctrine for the prevention of injustice and to guard against fraud. Therrell v. Riley, 151 So. 305 (Fla. 1932). Those elements of estoppel present in this case (assuming Petitioner never filed an election) rely on Petitioner's acquiescence in having his retirement deductions reduced from six percent (6 percent) to four percent (4 percent), thereby ratifying such action and waiving his right now to contest the fact that he did not file the appropriate form to authorize the lower deductions from his pay. This is sometimes called quasi-estoppel since the facts here involved do not conform to the essential elements of estoppel, which have been defined as:

    
    

    1. a representation by the party estopped to the party claim-

       ing the estoppel as to some material fact, which representation is con- trary to the condition of affairs later asserted by the estopped party;

    2. a reliance on this represen- tation by the party claiming the estoppel; and a change in the position of the party claiming the estoppel to his detriment, caused by the repre- sentation and his reliance thereon.

       22 Fla.Jur. 2d 31, Estoppel and Waiver.

       
       

17. Petitioner made no representation to Respondent of any fact. Petitioner's employer notified Respondent (or predecessor) that Petitioner had elected to transfer to Division B, reduced Petitioner's contributions to the retirement fund, and Petitioner took no action to correct the situation he now contends was incorrect. By failing to take action to be returned to Division A, if that is what he desired, Petitioner acquiesced in and ratified the action taken. He became irrevocably covered by social-security for the period he worked for Palm Beach County. He received the benefits the vast majority of SCOERS employees opted for and Respondent received a correspondingly lower contribution to the retirement fund. Fifteen years after he left SCOERS, and specific records are no longer available, Petitioner now claims he did not take the action upon which other action shown to have been taken, was based.

    
    

18. Billings v. City of Orlando, 287 So.2d 316 (Fla. 1973) involved an action by police officers to recover the mandatory contributions they made to the retirement system when they left the employ of the city before retirement. At the time the law provided such employees were entitled to fifty percent (50 percent) of the amount contributed. In denying the Petitioners' claim for the additional fifty percent (50 percent) they paid, the court held the employees were estopped from seeking a refund of sums contributed under the mandatory contribution plan in excess of the fifty percent (50 percent) refund allowed under the statutes. The court stated at p. 318:

    Having accepted the conditions of their contracts with the city and having enjoyed the benefits provided by these contracts while they remained in the city's service, the petitioners may not now reject the portions which displease them at this late date. One who accepts the benefits of a contract cannot, having retained these benefits, question the

    validity of the contract. (Citations omitted.)

    
    

19. Even if Petitioner had proved that he submitted no written election to transfer to Division B under SCOERS but accepted the benefits of lower retirement withholdings and social security coverage, he would be estopped from claiming retirement pay based on two percent (2 percent) per year average salary.

    
    

20. Respondent also contends Petitioner's claim is barred by the Statute of Limitations. While some question exists that the Statute of Limitations is applicable to administrative proceedings, in view of the conclusions otherwise reached it is not necessary to consider this issue.

    
    

21. From the foregoing it is concluded that George R. Frost elected to transfer to Division B in SCOERS in 1957, and that this election was acted upon by Palm Beach County who so notified the section of state government maintaining retirement records for state and county officers and employees, Even if Petitioner had not made such an election in writing, his acceptance of the benefits of lower deductions and social security coverage estop him from claiming otherwise. As a result his retirement benefits should be computed upon

l. 17 years at two percent (2 percent) plus 12.91 years at one and one-half percent (1.5 percent) of his average pay as computed by Respondent. It is

RECOMMENDED that the Petition of George R. Frost to have the years he was covered by SCOERS be multiplied by two percent (2 percent) times his final average salary be DENIED and this Petition dismissed.

ENTERED this 20th day of October, 1983, at Tallahassee, Florida.

K. N. AYERS, 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 20th day of October, 1983.

COPIES FURNISHED:

Ronald C. LaFace, Esquire Post Office Drawer 1858 Tallahassee, Florida 32302

Augustus D. Aikens, Jr., Esquire Division of Retirement Department of Administration 2639 North Monroe Street

Suite 207C-Box 81

Tallahassee, Florida 32301

Nevin G. Smith, Secretary Department of Administration Carlton Building Tallahassee, Florida 32301

Docket for Case No: 83-001348

Orders for Case No: 83-001348