STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CARL E. R. NELSON, )

)

Petitioner, )

)

vs. ) CASE NO. 87-5541

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

)

Respondent. )

)

RECOMMENDED ORDER

A hearing in this case was held in Ft. Myers, Florida, on April 28, 1988, before Arnold H. Pollock, Hearing Officer. The issue for consideration was whether Petitioner should be given credit under the Florida Retirement System for his service during the month of July, 1963.

APPEARANCES

For Petitioner: E. G. Couse, Esquire

Grace and Couse, P.A. Post Office Drawer 1647 Ft. Myers, Florida 33902

For Respondent: William A. Frieder, Esquire

Senior Attorney

Office of the General Counsel Department of Administration

440 Carlton Building Tallahassee, Florida 32399-1550

BACKGROUND INFORMATION

On November 16, 1987, in response to Petitioner's prior letter concerning the status of his employment with the State of Florida during the month of July, 1963, A. J. McMullian, III, State Retirement Director, by letter, advised Petitioner that he would not be given credit for retirement for that month because he had been paid for that period out of "other personal services" funds. Petitioner, by letter dated December 1, 1987, appealed Mr. McMullian's decision and requested a formal hearing. The matter was referred to the Division of Administrative Hearings, and on January 26, 1988, the undersigned set the case for hearing. It was held as scheduled.

At the hearing, Petitioner testified in his own behalf and introduced Petitioner's Exhibits 1-10. Respondent presented the testimony of Ruth Sansom and Bill Meale by depositions which were received over objection by Petitioner, as Respondent's Exhibits A and B.

No transcript of the hearing was furnished. However, both parties submitted Proposed Findings of Fact which have been ruled upon in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. In April, 1963, Petitioner, Carl E. R. Nelson, soon to graduate from Florida Southern College with a degree in citrus, wrote to representatives of the State of Florida, Department of Agriculture, with questions regarding his possible employment by the agency upon his graduation. In his reply letter to Petitioner, dated April 24, 1963, H. L. Jones, Assistant Director, Division of Plant Industry, inter alia, outlined the benefits package offered to state employees which convinced Petitioner to apply for a position with the state rather than work for the federal government, which reportedly paid 40% more than the state for similar positions.

   
   

2. After an interview with Mr. Jones and the Division Director, Mr. Nelson was offered a regularly established position with the Division of Plant Industry in its Miami office at a salary of $405.00 per month. The letter of notification to him indicated his first six months employment would be on a "probationary" basis. Petitioner was sent an "info" copy of a June 26, 1963 memo from the Department of Agriculture's Personnel Director to the Director of Petitioner's Division, reflecting he was to be paid out of "OPS" funds.

   However, neither the Division Director's letter nor that of the Secretary of Agriculture, advising him of his hiring, made any mention of the source of his pay or indicated he would be other than a regular probationary employee.

   Petitioner believed that from the day he began work, on July 1, 1963, he was earning credit toward retirement.

   
   

3. In February, 1968, unsolicited by Petitioner, the Department of Agriculture sent him a notice of Continuous and Creditable Service calculation which reflected his beginning employment date as July 1, 1963, and that as of December 31, 1967, he had accumulated four years, 6 months of total continuous and creditable service. Computing back reveals service began on July 1, 1963.

   
   

4. On October 31, 1973, a memo from one Department of Agriculture office to another, with an information copy to Petitioner, reflected he had completed ten years service in July, 1973, and an August 10, 1972 memo to Mr. Nelson, in relation to his military service, reflected the Department's calculation that he would complete ten years service in July, 1973.

   
   

5. Twenty-two Personnel Action Request Forms of the Department of Agriculture, relating to the Petitioner, and dated from September 23, 1970 to August 14, 1985, all reflect Petitioner's initial service date as July 1, 1963. Ten employee leave statements pertaining to Petitioner, covering the period November 13, 1987 through March 31, 1988 also reflect his continuous creditable service date as July 1, 1963.

   
   

6. In early 1975, Petitioner requested of the Department of Agriculture an audit of his service time. This request was forwarded to the Division of Retirement. Mrs. Ruth Sansom, Bureau Chief of Retirement Calculations did the check and determined that as of the end of March, 1975, Petitioner had 11.67 years creditable service. This equates to 11 2/3 years or 11 years, 8 months. Mrs. Sansom's computation was based in part on a November 9, 1973 record check of Department of Agriculture payroll tapes which showed that for July, 1963, Petitioner was paid out of OPS funds. Computing back, 11 years and 8 months prior to March 31, 1975, is August 1, 1963. Consequently, as early as May 1,

   1975, Petitioner was advised he was not given credit for the month of July, 1963, but it is obvious he did not recognize the situation as it existed.

   
   

7. In October, 1987, Petitioner was again advised by the Division of Retirement, as a response to his inquiry regarding credit for his military service, that as of the end of July, 1987, he had accumulated 24 years service indicating his creditable service started on August 1, 1963, not July 1, 1963. If the latter had been the case, his record would show 24 years, 1 month. It was this last credit report which prompted Petitioner's request for hearing.

   
   

8. The evidence of record shows clearly that Petitioner began work with the State of Florida on July 1, 1963 as a probationary but not temporary employee and served continuously since that time. He was paid for the month of July, 1963, out of OPS funds. The June 26, 1963 memo from the Personnel Director to Petitioner's employer indicates he was to be on probationary status for six months and paid out of OPS funds. By implication that could mean he would not be a regular employee during the six months probationary status, but the fact that the source of payroll funds for Petitioner was changed to regular funds after one month would also imply he was supposed to be a regular employee from the inception of his employment, and this is supported by the recruiting correspondence which referred to the many benefits which inure only to regular employees. Consequently, it is found that Petitioner was intended to be a regular employee from the inception of his employment, but he was paid out of OPS funds for the month of July, 1963.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this hearing.

   
   

10. The Division of Retirement has denied Mr. Nelson retirement credit for the month of July, 1963, on the basis that he was paid for that period out of "other personal services" funds. The Division contends that this payment factor establishes that for that one month he was not occupying a regularly established position, and, therefore, could not earn retirement credit.

    
    

11. In defining the various classes of state employees for planning and budgeting purposes, the legislature, at Section 216.011(x), Florida Statutes, defined "other personal services" as:

    
    

    "... the compensation for services rendered by a person who is not a regular or full-time employee filling an established position. This definition includes, but is not limited to, services of temporary employees, students or graduate assistants, ... and other services specifically budgeted by each agency in this category.

    1. In distinguishing payments to be made from salaries and appropriations and other-personal-services appropriations, those persons filling established positions shall be paid from salaries appropriations and those persons performing services for a state

       agency, but who are not filling established positions, shall be paid from other-personal-services appropriations.

    2. It is further intended that those persons paid from salaries appropriations shall be state officers or employees and shall be eligible for membership in a state retirement system and those paid from other-personal- services appropriations shall not be eligible for such membership."

       
       

12. Since Petitioner herein was paid from other-personal-services appropriations for the month of July, 1963, he would not be eligible for membership in the state retirement system for that period, under the terms of the statute.

    
    

13. It is clear, however, that the Department of Agriculture intended to hire Petitioner as a full time employee from the inception. All documentation for the next decade, including promotions and pay change statements reflected his status as a regularly established employee. Only when the Division of Retirement caught the error of pay accounts, did any question arise as to his status.

    
    

14. Respondent appears to treat the Division of Retirement as a entity separate and apart from the Department of Agriculture. What is clear, however, is that both agencies are a part of the State of Florida and actions by one may well constitute an estoppel against the other and that is the case here. When the Department of Agriculture speaks, it speaks for the State of Florida and all its Departments.

    
    

15. It being clear that the Department of Agriculture intended to hire Respondent as a regularly established employee from the inception of his service, the Division of Retirement cannot now claim otherwise.

    
    

16. There is no doubt that in his letter of June 26, 1963 to Dr. Cowperthwaite, Petitioner's new supervisor, the Department's Personnel Director indicated Petitioner was to be paid out of "other personal services" funds. However, the letter is also clear that Petitioner was to be employed on a six month probationary basis, a status normally reserved for employees occupying a regularly established position, and the position was specifically described in the letter. When those circumstances are considered along with the fact that after only one month, petitioner's consideration began to be paid out of "salaries" appropriations and he was enrolled in the state retirement plan, it becomes clear that he was originally hired for a regularly established position, and the direction to pay him from OPS funds was an error quickly corrected.

    
    

17. Under these circumstances, he should be granted credit for that month toward retirement.

RECOMMENDATION

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

Recommended that Petitioner, Carl E. R. Nelson be granted credit toward state retirement for the month of July, 1963.

Recommended in Tallahassee, Florida, this 7th day of May, 1988.

ARNOLD H. POLLOCK

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1988.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-5541

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case.

For the Petitioner

1. Accepted and incorporated herein.

2 - 3. Accepted as to the fact that Respondent was offered employment. Rejected as to the fact that the "offer" of retirement was the motivating factor in Petitioner's choice to accept state rather than federal employment.

4. Accepted and incorporated herein.

5 - 8. Accepted and incorporated herein.

1. Accepted and incorporated herein.

2. Accepted and incorporated herein except for the finding that Petitioner was never notified he had been paid one month out of OPS funds. However, the method of notification was erroneous in content and did not serve to bring this change to his attention.

3. Accepted and incorporated herein.

For the Respondent

1 - 2. Accepted and incorporated herein.

1. Accepted but irrelevant.

2. Accepted and incorporated herein.

3. Accepted and incorporated herein.

4. Rejected.

COPIES FURNISHED:

E. G. Couse, Esquire Grace and Couse, P.A. Post Office Drawer 1647 Ft. Myers, Florida 33902

William A. Frieder, Esquire Senior Attorney

Office of the General Counsel Department of Administration

440 Carlton Building Tallahassee, Florida 32399-1550

Adis Vila, Secretary Department of Administration

435 Carlton Building Tallahassee, Florida 32399-1550

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

AGENCY FINAL ORDER

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

STATE OF FLORIDA DEPARTMENT OF ADMINISTRATION

DIVISION OF RETIREMENT

CARL E. R. NELSON,

Petitioner,

vs. CASE NO. DR87-16

DOAH CASE NO. 87-5541

STATE OF FLORIDA,

DEPARTMENT OF ADMINISTRATION, DIVISION OF RETIREMENT,

Respondent.

/

FINAL ORDER

Carl E. R. Nelson, Petitioner, seeks service credit under the Florida Retirement System for service in the Department of Agriculture during the month of July, 1963 when he was paid from an Other Personal Services (OPS) account.

The Division of Retirement, advised Petitioner by letter dated November 16, 1987, that July, 1983, was not creditable service for him because he was paid from an OPS account and provided him a clear point of entry into the administrative appeal system. Petitioner requested and received a hearing pursuant to Section 120.57(1), Florida Statutes on August 28, 1988, which resulted in a Recommended Order dated May 7, 1988. A copy of the Division's letter and of the Recommended Order is attached to this Order as Exhibit A and Exhibit B respectively.

The facts found by the hearing officer are largely not in dispute. The Findings of Fact in the Recommended Order are, therefore, adopted as the Findings of Fact of this agency. For the convenience of the parties, and as an

aid to understanding why the Division of Retirement cannot adopt the Conclusions of Law in that Recommended Order, the following brief summary of those facts is presented here.

When Petitioner began to look for work, an offer of employment was made to him by H. L. Jones, the Assistant Director of the Division of Plant Industry of the Department of Agriculture (Agriculture). He was impressed with the outline of benefits presented to him by Agriculture and chose to work for the State of Florida based at least in part upon that benefit package. Retirement benefits were a part of that package. For reasons which are not entirely explained in the Hearing Officer's Order, but which are not critical to our decision here, Petitioner was paid out of OPS funds for the first month of his employment. It appears clear that he was neither advised by Agriculture of the nature of the OPS payment nor was he aware of the consequences it would have more than 20 years later. In this regard, the Division of Retirement (DOR) proposed a Finding of Fact to the hearing officer which emphasized that all of Petitioner's exhibits, with the exception of Petitioner's Exhibit 10, were documents generated by Agriculture and not by the Division of Retirement. 1/ Proposed Finding of Fact No. 3 was accepted by the Hearing Officer and incorporated within his recommendation. We disagree with the Hearing Officer, however, that this finding is irrelevant which is itself a legal conclusion. That finding highlights Petitioners own testimony and the other findings of fact made by the Hearing Officer which clearly indicate that the Division of Retirement made no representations of any kind to Petitioner concerning his creditable service until October of 1987, having had no reason to do so. At that time DOR advised he would not be given service credit for June, 1963 and this dispute ultimately followed. All of Petitioner's information, conclusions, and reliance, were based upon material representations made not by the Division of Retirement but by Agriculture, Petitioner's employer. When called upon to do so, the Division of Retirement submitted a statement of Petitioner's creditable service which deleted credit for July, 1963, as discussed above, because it was OPS service.

Petitioner can receive creditable service for July, 1963 according to the law only if he was employed in a regularly established position for which he received salary payments.

'Other Personal Services' means the compensation for services rendered by a person who is not a regular or full-time employee filling an established position. This definition includes, but is not limited to, services of temporary employees, student or graduate assistants, persons on fellowship, part-time academic employees, board members, and consultants and other services specifically budgeted by each agency in this category. (emphasis supplied)

1. In distinguishing between payments to be made from salaries appropriations and other- personal-services appropriations, those persons filling established positions shall be paid from salaries appropriations and those persons performing services for a state agency, but who are not filling established positions, shall be paid from other-personal- services appropriations.

2. It is further intended that those persons paid from salaries appropriations shall be state officers or employees and shall be eligible for membership in a state retirement system and those paid from other-personal- services appropriations shall not be

eligible for such membership. Section 216.011(1)(x), Florida Statutes. See Also Section 121.021(11) and Rule 22B-6.001(38) and (46), F.A.C.

Since the law is clear that Petitioner may not receive service credit for July, 1963 if he was paid from an OPS account, and because he was paid from an OPS account, only the theory of estoppel as advanced by the Hearing Officer would prevent DOR from asserting this defense to Petitioner's claim for service credit.

Indeed, it is the theory of estoppel upon which the Hearing Officer predicates his recommendation that Petitioner be given service credit for July, 1963. He reasons that because Agriculture made certain statements to Petitioner upon which he relied to his detriment, that the Division of Retirement should be estopped from asserting the OPS defense. It is with the link between the assertions made by Agriculture and the estoppel of the Division of Retirement that we must take issue and upon which we must reject the conclusions of the Hearing Officer.

It must be remembered that estoppel can be raised against the State of Florida only in the presence of exceptional circumstances. DOA v. Flowers, 356 So.2d 14 (1 DCA Fla., 1978). It is equitable estoppel which is sought to be raised against the Division of Retirement here. Equitable estoppel, requires a representation by the party sought to be estoppel as to a material fact that is contrary to a later asserted position; the one seeking to invoke estoppel must have detrimentally relied on that representation and must have made a change in position as a result of that reliance. State Department of Revenue v. Anderson, 403 So.2d 397 (Fla. 1981) at 400.

But the doctrine of estoppel is not applicable in transactions which are forbidden by statute or which are contrary to publish policy. Dade County v. Bengis Association, Inc. 257 So.2d 291 (Fla. 3rd DCA), cert. denied 261 So.2d 839 (Fla. 1972). Also, the courts have consistently refused to apply estoppel against the State on the basis of unauthorized acts or mistakes. Austin v.

Austin, 350 So.2d 102 (1 DCA Fla. 1977) cert. denied 357 So.2d 184 (Fla. 1978).

In the Austin case a representation as to a material fact relied upon by Austin was contained in a Division of Retirement brochure. The statement was in error and was in conflict with the existing law at that time. The court refused to permit estoppel to be raised against the Division of Retirement in that case. Here, the reasons for prohibiting the use of estoppel are even more apparent.

The Division of Retirement made no representation of a material fact to Petitioner and had no control over those who did. Further, there is no logical or legal reason to charge the Division of Retirement with statements made by the Department of Agriculture. Indeed, the courts have held that they will not permit statements made by one agency, when contrary to later asserted facts by a different agency, to be binding on that second agency. That precise proposition

was discussed by the court in Mauldin v. State of Florida, Department of Administration, Division of Retirement, 468 So.2d 332 (1 DCA Fla. 1985) Reh. Den.

In Mauldin, a Department of Transportation employee sought disability retirement benefits claiming he was totally and permanently disabled. The Department of Transportation refused to rehire him and stated that in their view he was disabled and no longer employable. The Division of Retirement, however, contended that Mauldin was indeed employable even though his own department refused to take him back. The court refused to allow the statements of the Department of Transportation to be used to create an estoppel against the Division of Retirement. There, too, the argument was made that both the Department of Transportation and the Department of Administration (DOR) were both part of the State of Florida and therefore one cohesive whole. The statements of one should therefore be binding against the other part of that whole. The court specifically rejected that notion, and properly so. Since the Hearing Officer failed to distinguish Mauldin from this case in any plausible manner, and indeed failed to mention it at all, and because he failed to rule upon or even mention any of the proposed conclusions of law presented by both parties, we can only conclude that he did not consider that case and its progeny which were in those proposed conclusions of law.

It requires no statement of authority to support the proposition that the interpretation of a law by the agency charged with the administration of that law is entitled to great weight. Here it appears that the Hearing Officer gave the Division's construction of the law neither great weight nor even consideration although it was adequately presented to him. This is error and requires us to reject his ultimate recommendation. It is simply contrary to the law.

In view of the foregoing it is hereby Ordered that the request of Carl E.

1. Nelson for the purchase of service credit during the month of July, 1963, must be and is hereby denied. Further, insofar as the Conclusions of Law expressed in the Recommended Order from the Hearing Officer are inconsistent with this Order they too are rejected.

   
   

   THIS ORDER CONSTITUTES FINAL AGENCY ACTION, THE PARTIES ARE NOTIFIED THAT THEY MAY APPEAL THIS ORDER BY FILING A NOTICE OF APPEAL IN THE DISTRICT COURT OF APPEAL IN THE FIRST OR SECOND APPELLATE DISTRICT OF FLORIDA. SUCH NOTICE MUST BE FILED WITH THE CLERK OF THIS DIVISION AND WITH THE DISTRICT COURT OF APPEAL TOGETHER

   WITH THE FILING FEE OF $100 WITHIN THIRTY

   1. CALENDAR DAYS OF THE DATE THIS ORDER IS FILED IN THE OFFICIAL RECORDS OF THE DIVISION OF RETIREMENT AS INDICATED IN THE CLERK'S CERTIFICATE BELOW OR FURTHER REVIEW OF THIS ACTION WILL BE BARRED.

      DONE AND ORDERED at Tallahassee, Leon County, Florida this 20th day of June, 1988.

      
      

      1. J. MCMULLIAN III

State Retirement Director

ENDNOTE

1/ Exhibit 10 consisted of two pages the first of which was a request for the purchase of military service and the second was a Form advising Petitioner that his military service was not creditable because it was for training which is not creditable service under the Florida Retirement System.

CLERK'S CERTIFICATE

I HEREBY CERTIFY that this Final Order was filed with the Clerk of the Department of Administration, Division of Retirement, on this 20th day of June, 1988, and that on this some date, copies were furnished to the Division of Administration Hearings, The Oakland Building, 2009 Apalachee Parkway, Tallahassee, Florida 32301 to Carl E. R. Nelson, c/o E. G. Couse, Esquire, Grace & Couse, P.A., Post Office Drawer 1647, Ft. Myers, Florida 33902 and to William A. Frieder, Esquire, Senior Attorney, Department of Administration, Office of General Counsel, 440 Carlton Building, Tallahassee, Florida 32399- 1550.

DEPUTY CLERK

Department of Administration Division of Retirement

440 Carlton Building Tallahassee, Florida 32399-1550 (904) 487-1230

Docket for Case No: 87-005541

Orders for Case No: 87-005541