vs. ) Case No. 97-1918
BUFORD M. ARTHUR, )
Intervenor. )
A formal hearing was held in this case before Larry J. Sartin, a duly designated Administrative Law Judge of the Division of Administrative Hearings, on October 1, 1997, in Ocala, Florida.
For Petitioner: William J. Phelan, Jr., Esquire
Bond, Arnett, and Phelan, P.A.
Leonard H. Klatt, Esquire Poe and Klatt, P.A.
The issue in this case is whether Buford M. Arthur's rights and benefits under the City of Ocala Employees' Retirement Plan and the City of Ocala Police Officers' Supplemental Pension Fund should be forfeited pursuant to Section 112.3173(3), Florida Statutes(1995).
An Agreement has been entered into between the Division of Administrative Hearings (hereinafter referred to as "Division") and the Boards of Trustees of the City of Ocala Employees' Retirement Plan and the City of Ocala Police Officers' Supplemental Pension Fund (hereinafter referred to as the "Boards"). Pursuant to the Agreement, the Division agreed to provide Administrative Law Judges to conduct hearings required under Section 112.3173, Florida Statutes (1995), on behalf of the Boards.
Pursuant to the Agreement, the Boards referred this matter to the Division on April 21, 1997, to conduct a forfeiture hearing. The Boards designated the City of Ocala to represent their interest in this proceeding. The matter was assigned to the undersigned on April 28, 1997, by an Initial Order entered by the Division. The Initial Order incorrectly styled the matter Buford M. Arthur v. City of Ocala.
In response to the Initial Order, Mr. Arthur suggested that the style of this case should be Boards of Trustees; City of
Ocala Police Officers' Supplemental Pension Plan; and Ocala Employee's Retirement Plan v. Buford M. Arthur. On July 16, 1997, an Order Concerning Style of Case was entered. The parties were informed that the style of this case suggested by Mr. Arthur appeared to be correct and, therefore, would be accepted unless the parties could show cause on or before August 1, 1997, why a different style should be used. It was recognized in the order that, regardless of whether the correct party was the City of Ocala or the Boards, that party was the Petitioner and Mr. Arthur was the Respondent.
On July 29, 1997, the City of Ocala filed a Response to Order to Show Cause Concerning Style of Case. Argument on the issue was also heard during a motion hearing conducted by telephone. In the response of the City of Ocala to the order to show cause, it was represented that the City of Ocala is responsible for the administration of the City of Ocala's pension fund pursuant to Section 11.01 of the City of Ocala Charter, and that it must approve amendments to the Police Officers' Supplemental Pension Fund pursuant to Section 16-65(j), Ocala Code of Ordinances. It was also represented during the telephone hearing that the City of Ocala had been designated to represent the Boards pursuant to the Agreement entered into with the Division. Although this representation was accepted as correct in an order entered August 26, 1997, the Agreement does not include such a designation. Nevertheless, based upon the
representations in the response to the order to show cause filed by the City of Ocala, the City of Ocala will remain designated as the Petitioner in this case.
On September 10, 1997, a Motion to Intervene was filed by Rosemary Arthur, the wife of Mr. Arthur. An Order Granting Motion to Intervene was entered September 24, 1997, based upon a response of the City of Ocala indicating it did not object if certain conditions were imposed on Ms. Arthur's participation.
At the formal hearing the City of Ocala presented the testimony of Greg Graham, a Major with the City of Ocala Police Department, and Laurel Boren. The City of Ocala also published excerpts of the deposition testimony of Mr. Arthur. The City of Ocala offered 15 exhibits, including the deposition testimony of Mr. Arthur. All 15 exhibits were accepted into evidence.
Mr. Arthur testified on his own behalf. Ms. Arthur also testified on her own behalf. Mr. Arthur also presented the testimony of Major Graham. Mr. Arthur did not offer any exhibits.
No transcript of the hearing was ordered by the parties.
The parties agreed to file proposed orders within ten days of the formal hearing. On October 13, 1997, the City of Ocala filed two Bench Memoranda. On October 17, 1997, Mr. and Ms.
Arthur filed a Proposed Final Order of Respondent and Intervenor. This forum does not have authority to enter a Final Order in this case, however.
Respondent, Buford M. Arthur, began employment with the City of Ocala Police Department (hereinafter referred to as the "Police Department") in late 1965 or 1966. Mr. Arthur terminated his employment with the Police Department in the early 1970s.
Mr. Arthur was re-employed by the Police Department on January 2, 1975, and remained employed by the Police Department until his retirement.
While employed by the Police Department, Mr. Arthur reached the rank of Corporal.
After being re-employed by the Police Department in 1975, Mr. Arthur served as the Police Department's Forfeiture Officer.
As part of his duties as Forfeiture Officer, Mr. Arthur was responsible for depositing certain funds into a Police Department Trust Fund or a trust fund of a joint task force of the Police Department and the Marion County Sheriff's Office (hereinafter referred to as the "Sheriff's Office").
Funds provided to Mr. Arthur for deposit in the Police Department Trust Fund included funds seized as evidence by, and in the custody of the Police Department. Funds provided to Mr. Arthur for deposit in the joint task force trust fund included funds seized as evidence by, and in the custody of the task force.
The task force was formed by the Sheriff's Office and the Police Department pursuant to a Special Voluntary Cooperation Agreement (hereinafter referred to as the "Cooperation Agreement") between the Police Department and the Sheriff's Office.
The Police Department and Sheriff's Office entered into the Cooperation Agreement pursuant to the Florida Mutual Aid Act, Chapter 23, Florida Statutes. Pursuant to the Cooperation Agreement, the Police Department and Sheriff's Office established the "Ocala-Marion County Narcotics and Vice Task Force" (hereinafter referred to as the "Task Force").
The Cooperation Agreement specified how operations of the Task Force were to be funded by the Police Department and the Sheriff's Office. The Cooperation Agreement also provided that forfeited cash and the proceeds from the sale of forfeited property, after expenses, were to be distributed 60% to the Sheriff's Office and 40% to the Police Department.
All cash and forfeited property seized by the Police Department or the Task Force was held for at least sixty days. If not claimed within sixty days after the conclusion of the criminal proceedings against the individual from whom the property was seized, the seized property was sold. Cash from sales of forfeited property and seized cash held at least sixty days by the Task Force was distributed by the Fiscal Manager of the Sheriff's Office 60% to the Sheriff's Office and 40% to the
Police Department. At times Mr. Arthur was responsible for such funds and cash considered forfeited to the Police Department as Forfeiture Officer.
Forfeited funds received by Mr. Arthur were to be deposited into the Law Enforcement Trust Fund or the Task Force Trust Fund.
On or about June 15, 1994, Mr. Arthur received
$1,204.00 for deposit into the Task Force Trust Fund. Mr. Arthur admits that he took these funds. Included in the total funds Mr. Arthur received and kept were the following amounts involving the following cases and individuals:
Case Number Defendant Amount
0-93-09-1974 Hanson Collins $ 20.00 S93-30856 Robert Ringold 250.00
Hanson Collins was charged with two felony counts. A Judgment was entered regarding Mr. Collins' case on January 31, 1994.
Robert Ringold was charged with ten felony counts. A Judgment was entered regarding Mr. Ringold on March 14, 1994.
On or about July 8, 1994, Mr. Arthur received $810.00 for deposit into the Task Force Trust Fund. Mr. Arthur admits that he took these funds. Included in the total funds Mr. Arthur received and kept were the following amounts involving the following case and individual:
Case Number Defendant Amount S93-23897 Richard Bursey 50.00
Richard Bursey was charged with three felony counts. A Judgment was entered regarding Mr. Bursey on April 11, 1994.
On or about January 20, 1995, Mr. Arthur received
$1,267.00 for deposit into the Task Force Trust Fund. Mr. Arthur admitted that he took these funds. Included in the total funds Mr. Arthur received and kept were the following amounts involving the following cases and individuals:
Case Number Defendant Amount
S94-18809 Teresa Martin $ 60.00
S94-18838 David Lane 20.00
Teresa Martin was charged with two felony counts. A Judgment was entered regarding Ms. Martin on September 13, 1994. David Lane was charged with four felony counts. A Judgment was entered regarding Mr. Lane on July 28, 1994.
The funds seized from Hanson Collins, Robert Ringold, Richard Bursey, Teresa Martin, and David Lane were turned over to Mr. Arthur, an employee of the Police Department, more than sixty days after Judgments were entered in their cases. The Police Department was ultimately entitled to receive 40% of these funds.
Mr. Arthur began taking funds meant for deposit into the Law Enforcement Trust Fund in June of 1994 and continued to do so through approximately January of 1995. Mr. Arthur admits that he took approximately $3,200.00 to $5,000.00.
On February 29, 1996, Mr. Arthur retired from the Police Department. After his retirement, Mr. Arthur began
receiving retirement benefits from the City of Ocala Employee's Retirement Plan and the City of Ocala Police Officers' Supplemental Pension Fund. Mr. Arthur continues to receives benefits from these public retirement plans.
After retiring from the Police Department Mr. Arthur was charged with Grand Theft. This charge arose as the result of Mr. Arthur's theft of funds entrusted to him for deposit into the Task Force Trust Fund.
By letter dated October 22, 1996, the Chairman of Board of the City of Ocala Police Officers' Supplemental Pension Fund provided Mr. Arthur with a copy of Section 112.3173, Florida Statutes. Mr. Arthur discussed the letter and the statute with his attorney, James Reich. The evidence failed to prove that any representative of the City or the Boards discussed Section 112.3173, Florida Statutes, with Mr. Arthur or gave him any assurances that he would not be subject to its provisions if he entered a plea of nolo contendere to the charges against him.
On January 29, 1997, Mr. Arthur signed a Waiver of Rights and Agreement to Enter Plea. Mr. Arthur agreed to enter a plea of nolo contendere to the change of Grand Theft upon certain terms set out in the agreement. In particular, the agreement provided, in relevant part, that adjudication would be withheld; that Mr. Arthur would be sentenced to two years probation; that he would pay court costs; and that he would make restitution to
the City of Ocala Employees' Retirement Plan and the City of Ocala Police Officers' Supplemental Pension Fund.
On January 29, 1997, Mr. Arthur entered a plea of nolo contendere consistent with the Waiver of Rights and Agreement to Enter Plea. Mr. Arthur's plea and the terms of the agreement to enter plea were accepted by the Court. Petitioner's Exhibits 3 and 4.
Mr. Arthur made restitution in the amount of
$11,825.95, although Mr. Arthur asserts that he did not take more than $3,200.00 to $5,000.00.
Mr. Arthur is married to Intervenor, Rosemary Arthur. They were married November 20, 1994.
CONCLUSIONS OF LAW
Jurisdiction and Burden of Proof.
The Division of Administrative Hearings has jurisdiction of the parties to, and the subject matter of, this proceeding. Section 120,65(8), Florida Statutes (Supp. 1996). Pursuant to Section 120.65(8), Florida Statutes (Supp. 1996), the Division entered into a contract with the Boards to provide Administrative Law Judges to conduct Chapter 120, Florida Statutes, proceedings on behalf of the Boards.
The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue in a Chapter 120, Florida Statutes, proceeding. Antel v. Department of Professional Regulation, 522 So. 2d 1056 (Fla. 5th
DCA 1988); Department of Transportation v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); and Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 249 (Fla. 1st DCA 1977).
In this case, it is the City, on behalf of the Boards, that is asserting the affirmative of the issue: that Mr. Arthur's retirement rights and benefits must be considered forfeited pursuant to Section 112.3173(3), Florida Statutes.
Section 112.3173(3), Florida Statutes.
Section 112.3173(3), Florida Statutes, provides, in relevant part, the following:
(3) FORFEITURE.-- Any public officer or employee who is convicted of a specified offense committed prior to retirement . . . shall forfeit all rights and benefits under any public retirement system of which he or she is a member, except for the return of his or her accumulated contributions as of the date of termination.
The Boards determined that they were required to terminate Mr. Arthur's rights and benefits under the City of Ocala Employees' Retirement Plan and the City of Ocala Police Officers' Supplement Pension Fund because of Mr. Arthur's plea to the offense of Grand Theft relating to his theft of funds which were to be deposited into the Task Force Trust Fund.
In adopting Section 112.3173, Florida Statutes, the Legislature expressed the following intent:
INTENT.--It is the intent of the Legislature to implement the provisions of s 8(d), Art. II of the State Constitution.
Section 8(d), Article II of the Constitution of the State of Florida, provides the following:
(d) Any public officer or employee who is convicted of a felony involving a breach of public trust shall be subject to forfeiture of rights and privileges under a public retirement system or pension plan in such a manner as may be provided by law.
Mr. Arthur was a "Public Officer or Employee."
The terms "public officer or employee" are defined in Section 112.3173(2)(c), Florida Statutes, as follows:
(c) "Public officer or employee" means an officer or employee of any public body, political subdivision, or public instrumentality of the state.
The evidence proved that Mr. Arthur's employment by the Police Department comes within the foregoing definition. Mr. Arthur was, therefore, a public officer or employee for purposes of Section 112.3173(3), Florida Statutes.
Mr. Arthur was ”Convicted" Prior to Retirement.
The term "convicted" is defined in Section 112.3173(2)(a), Florida Statutes, as follows:
(a) "Conviction" and "convicted" mean an adjudication of guilt by a court of competent jurisdiction; a plea of guilty or nolo contendere; a jury verdict of guilty when adjudication of guilt is withheld and the accused is placed on probation; or a conviction by the Senate of an impeachable offense.
The evidence in this case proved that Mr. Arthur, "prior to retirement," pled nolo contendere to Grand Theft. Mr. Arthur's plea comes within the definition of the term "convicted"
specified in Section 112.3173(2)(a), Florida Statutes, and occurred at the time specified in the statute.
The disjunctive "or" is implied following semi-colons used in a definitional statute where the term "or" is used preceding the last in a series of subsections. State v. Herman,
466 So. 2d 435, at 436 (Fla. 5th DCA 1985). Applying this principle to Section 112.3173(2)(a), Florida Statutes, the definition of "convicted" must be read to included any one of the circumstances listed in the definition separated by a semi-colon. Therefore, "a plea of guilty or of nolo contendere" comes within the definition of "convicted" of Section 112.3173(2)(a), Florida Statutes, and as used in Section 112.3173(3), Florida Statutes.
Mr. Arthur has argued that the term "convicted" should be interpreted to mean only an adjudication of guilt in the context of a "jury verdict of guilty." In support of this argument, Mr. Arthur has cited Section 921.0011(2), Florida Statutes, which defines the term "conviction" as "a determination of guilt . . . regardless of whether adjudication is withheld."
Section 921.0011(2), Florida Statutes, has no application to this matter. Section 921.0011, Florida Statutes, specifically provides that the definitions therein, including the definition of "conviction," are provided for those terms as they are "used in this chapter . . . ." Therefore, by its own terms, the definition of "conviction" contained in Section 921.0011(2), Florida Statutes, relied upon by Mr. Arthur is limited in its
application to the use of the term in Chapter 921, Florida Statutes. Additionally, Mr. Arthur's argument ignores the fact that a specific definition of "convicted" is provided in Section 112.3173, Florida Statutes.
Mr. Arthur has also argued that, to the extent Section 112.3173(3), Florida Statutes, defines the term "convicted" to include a plea of nolo contendere, the provision is contrary to Section 8(d), Article II of the Constitution of the State of Florida. The undersigned has no authority to decide whether Section 112.3173, Florida Statutes, is unconstitutional. See Key Haven Associated Enterprises, Inc. v. Board of Trustees of Internal Improvement Fund, 427 So. 2d 153 (Fla. 1982); Cook v. Parole and Probation Commission, 415 So. 2d 845 (Fla. 1st DCA 1982); and Myers v. Hawkins, 362 So. 2d 926 (Fla. 1978).
Mr. Arthur's Conviction was of a "Specified Offense."
It is not every conviction that requires a forfeiture of retirement benefits under Section 112.3173(3), Florida Statutes. The conviction must be of a "specified offense."
The terms "specified offense" are defined in Section 112.3173(2)(e), Florida Statutes, in pertinent part, as follows:
(3) "Specified offense" means:
The committing, aiding, or abetting of an embezzlement of public funds;
The committing, aiding, or abetting of any theft by a public officer or employee from his or her employer;
. . . .
The offense to which Mr. Arthur plead nolo contendere was Grand Theft. The evidence proved that the offense arose as the result of Mr. Arthur's theft of funds entrusted to him for deposit after they were considered forfeited and had become the property, in whole or part, of the Police Department.
Mr. Arthur admitted stealing funds given to him on June 15, 1994, July 8, 1994, and January 20, 1995. Those funds were seized from criminal defendants by the Task Force. The evidence proved that at least some of those funds had not been claimed within sixty days after the conclusion of the proceedings against the criminal defendants from whom the funds were seized.
Section 705.105, Florida Statutes, provides, in pertinent part, the following concerning unclaimed property:
Title to unclaimed evidence or unclaimed tangible personal property . . . seized as evidence by and in the custody of a law enforcement agency shall vest permanently in the law enforcement agency 60 days after the conclusion of the proceeding.
If the property is of appreciable value, the agency may elect to:
Retain the property for the agency's own use;
Transfer the property to another unit of state of local government;
Donate the property to a charitable organization;
Sell the property at public sale, pursuant to the provisions of s. 705.103.
Based upon the provisions of Section 705.105, at least part of the money taken by Mr. Arthur was property of the Police Department or the Sheriff's Office and, therefore, constituted "public funds."
Mr. Arthur was, therefore, "convicted" of "committing
. . . theft . . . from his . . . employer," which constitutes a "specified offense" as defined in Section 112.3173(2)(e)2, Florida Statutes.
Mr. Arthur was also "convicted" of "committing . . . embezzlement of public funds," which constitutes a "specified offense" as defined in Section 112.3173(2)(e)1, Florida Statutes. "Embezzlement is broadly defined as the fraudulent appropriation of another's property by a person to whom it has been entrusted or into whose hands it has lawfully come." State v. Mischler,
488 So. 2d 523, at 526 (Fla. 1986). Mr. Arthur admitted to taking funds of the Police Department or the Sheriff's Office that had been entrusted to him only for deposit into accounts of the Police Department or the Sheriff's Office. His actions come within the definition of "embezzlement" as used in Section 112.3173(2)(e)1, Florida Statutes.
Consequences of Mr. Arthur's Conviction.
Section 112.3173(3), Florida Statutes, unequivocally provides that the consequence of an employee being convicted of a specified offense prior to the employee's retirement "shall" be forfeiture of all rights and benefits under any public retirement
system. Forfeiture is not, therefore, discretionary in this case.
Mr. Arthur had suggested in pleadings filed in this case and his proposed order that Section 8(d), Article II of the Constitution of the State of Florida does not mandate forfeiture. This argument is irrelevant at this stage of the proceedings.
The only issue before this forum is the language of Section 112.3173(3), Florida Statutes. The statute allows no discretion in determining whether an employee who has been convicted of a specified offense has forfeited his or her retirement rights and benefits.
At hearing, Mr. Arthur presented evidence in the nature of mitigating circumstances. Mr. Arthur presented evidence concerning his 29-year record as an employee of the Police Department. He also presented evidence concerning his cooperation with authorities before and after being charged with Grand Theft. Evidence concerning these issues, however, is irrelevant under Section 112.3173(3), Florida Statutes. Having concluded that Mr. Arthur had been convicted of a specified offense as defined in Section 112.3173(3), Florida Statutes, forfeiture is mandatory.
The Doctrine of Equitable Estoppel.
Although Mr. Arthur has not raised the issue of whether the doctrine of equitable estoppel applies to this matter in his proposed order, evidence concerning the inapplicability of this
doctrine was presented at the final hearing. The City also filed a Bench Memorandum addressing the issue subsequent to the hearing.
The doctrine of equitable estoppel may be resorted to against a governmental agency where an individual relies on a representation of the government and the government subsequently changes its position to the detriment of the individual that relied upon the original representation. This doctrine has been found to apply against the government only in rare instances and under exceptional circumstances. Calusa Golf, Inc. v. Dade County, 426 So. 2d 1165 (Fla. 3d DCA 1983).
In order for the doctrine to apply, it must be proved that the following occurred:
A representation as to a material fact that is contrary to a later-asserted position;
Reliance on that representation; and
A change in position detrimental to the party claiming estoppel, caused by the representation and reliance thereon.
Department o Revenue v. Anderson, 403 So. 2d 397, at 400 (Fla. 1981). See also Tri-State Systems, Inc. v. DOT,
500 So. 2d 212 (Fla. 1st DCA 1986), rev. denied, 506 So. 2d 1041 (1987).
The evidence in this case failed to prove that any of the elements of the doctrine apply in this case. The only action of the Boards in this case prior to Mr. Arthur's plea was to send him a copy of the applicable law, Section 112.3173, Florida
Statutes. Neither the City or the Boards made any representation to Mr. Arthur concerning the impact of his plea on his retirement benefits. Consequently, there was no representation upon which Mr. Arthur could have relied to his detriment.
The evidence failed to prove that the doctrine of equitable estoppel applies to the circumstances of this case.
Rosemary Arthur's Interest.
It has been suggested that Ms. Arthur has certain rights as a spouse to Mr. Arthur's retirement benefits. Therefore, it is argued that Section 112.3173(3), Florida Statutes, should not be applied against those rights. The evidence failed to support this argument.
The evidence failed to prove that Ms. Arthur has any rights to retirement benefits independent from Mr. Arthur. Therefore, any rights which she may have are extinguished by the mandatory forfeiture of Mr. Arthur's retirement rights and benefits pursuant to Section 112.3173(3), Florida Statutes.
RECOMMENDED that a Final Order be entered by the Boards of Trustees of the City of Ocala Employees' Retirement Plan and the City of Ocala Police Officers' Supplemental Pension Fund finding that Buford M. Arthur has forfeited all rights and benefits under the City of Ocala Employees' Retirement Plan and the City of
Ocala Police Officers' Supplemental Pension Fund and dismissing the petitions of Buford M. Arthur and Rosemary Arthur.
DONE AND ENTERED this 30th day of October, 1997, in Tallahassee, Leon County, Florida.
LARRY J. SARTIN
Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 1997.
William H. Phelan, Jr., Esquire Bond, Arnett and Phelan, P.A. Post Office Box 2405
Leonard H. Klatt, Esquire POE and KLATT
H. Lee Dehner, Esquire Christiansen and Dehner, P.A. 2975 Bee Ridge Road, Suite C Sarasota, Florida 34239
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.
