STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CITY OF OCALA, )

)

Petitioner, )

)

vs. ) Case No. 97-2720

)

CARY F. HAYS, )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came on for consideration of the parties' Joint Motion for Entry of Recommended Order filed with the Division of Administrative Hearings on December 1, 1997.

APPEARANCES

For Petitioner: William H. Phelan, Jr., Esquire

Bond, Arnett and Phelan, P.A. Post Office Box 2405

Ocala, Florida 34478-2405

For Respondent: Cary F. Hays, pro se

1036 Northeast 14th Street Ocala, Florida 34470

STATEMENT OF THE ISSUE

The issue in this case is whether Cary F. Hays' rights and benefits under the City of Ocala Employees' Retirement Plan should be forfeited pursuant to Section 112.3173, Florida Statutes (1995).

PRELIMINARY STATEMENT

The Board of Trustees of the City of Ocala Employees Retirement Plan (the "Board") entered into a contract with the

Division of Administrative Hearings (the "Division") on April 1, 1997. Under the contract, the Division agreed to designate an Administrative Law Judge to conduct forfeiture hearings pursuant to Section 112.3173, Florida Statues, on behalf of the Board.

On April 21, 1997, the Board referred this case to the Division for a determination whether Respondent should forfeit his rights and benefits under the City of Ocala Employees' Retirement Plan. The Board designated Petitioner City of Ocala (Petitioner) to represent the Board's interest in this proceeding.

On June 16, 1997, the Division issued an Initial Order which designated the undersigned as Administrative Law Judge.

Petitioner filed a response to the Initial Order on July 2, 1997. On July 8, 1997, the undersigned issued a Notice of Hearing.

Said notice scheduled the case for hearing on October 14, 1997. On August 21, 1997, Petitioner filed an unopposed Motion to

Reschedule Hearing. An order dated August 27, 1997, granted a continuance and rescheduled the hearing for November 19, 1997.

On November 11, 1997, Petitioner filed an unopposed Motion to Continue Final Hearing. The undersigned entered an Order Granting Continuance and Requiring Report on November 12, 1997.

On December 1, 1997, the parties filed a Joint Motion for Entry of Recommended Order. The motion states that the parties have reached a settlement, whereby Respondent stipulated to forfeiture of his pension benefits. The parties further

stipulated to entry of a Recommended Order based on findings of fact set forth in their proposed recommended order.

FINDINGS OF FACT

The parties stipulated to the following facts:

1. Petitioner is a political subdivision within the state of Florida.

2. At all times relevant hereto, Respondent was a public employee of Petitioner.

3. Respondent entered a plea of no contest to the charge of grand theft on July 5, 1994.

4. An Order Withholding Adjudication of Guilt and Placing Defendant on Probation was entered July 5, 1994.

5. On April 17, 1995, Respondent agreed to assign his pension benefits to repay $74,212.08 to Petitioner.1

6. On November 11, 1997, Petitioner adopted Resolution 98-14 whereby Petitioner withdrew from the Debt Acknowledgment2 as said agreement was contrary to Section 112.3173, Florida Statutes (1995), and Article II, Section 8(d), Florida Constitution.

7. On November 11, 1997, Petitioner and Respondent agreed that Respondent would forfeit his pension benefits in return for Petitioner not initiating or pursuing any additional remedies against Respondent to secure restitution or reimbursement for the

   $74,212.08 that Respondent owed to Petitioner.

   
   

8. Respondent has never assigned his pension benefits as restitution for money owed to the City of Ocala Emergency Relief Fund, originally in the amount of $9,463.57, with a current

   balance of $8,629.01, and Respondent continues to owe this amount to said relief fund.

9. Respondent has agreed to release and pay to Petitioner his contributions to the pension system, in the amount of

   $215.88.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Section 120.65(8), Florida Statutes (1995).

11. Section 112.3173(3), Florida Statutes (1995), states as follows in pertinent part:

    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.

12. "Public employee" is defined in Section 112.3173(2)(c), Florida Statutes (1995), to mean an employee of any public body, political subdivisions, or public instrumentality within the State.

13. "Conviction" and "convicted" are defined in Section 112.3173(2)(a), Florida Statutes (1995), as follows:

    An adjudication of guilt by a court of competent jurisdiction; a plea of guilty or of nolo contendere; a jury verdict or guilty when adjudication of guilt is withheld and the accuse is placed on probation; or conviction by the Senate of an impeachable offense. (emphasis added.)

14. Respondent's plea of nolo contendere to grand theft constitutes a "conviction" for the purpose of Section 112.3173, Florida Statutes (1995).

    
    

15. "Specified offense" is defined in Section 112.3173(2)(e), Florida Statutes (1995), in pertinent part, to include the following: the committing, aiding or abetting of any theft by a public officer or employee from his or her

    employer; "

    
    

16. All necessary requirements of Section 112.3173, Florida Statutes (1995), having been satisfied, Respondent shall forfeit all rights and benefits under the City of Ocala Employees' Retirement Plan and the City of Ocala Employees' Retirement Fund. Further, based on Respondent's agreement, Respondent's contributions to the pension system shall be paid to the Petitioner.

RECOMMENDATION

Based upon the findings of fact and conclusions of law, it

is

RECOMMENDED:

That the Board enter a Final Order determining that

Respondent shall forfeit all his rights and benefits under the City of Ocala Employees Retirement Plan and the City of Ocala Employees Retirement Fund.

DONE AND ORDERED this 12th day of December, 1997, in Tallahassee, Leon County, Florida.

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847 Filed with the Clerk of the

Division of Administrative Hearings this 12th day of December, 1997.

ENDNOTES

1/ On or about April 17, 1995, Petitioner, the State Attorney's office, and Respondent entered into a DEBT ACKNOWLEDGEMENT, ABSOLUTE ASSIGNMENT OF PENSION BENEFITS AND INDEMNITY AND HOLD

HARMLESS AGREEMENT ("Debt Acknowledgment"). Within the Debt Acknowledgment, Respondent acknowledged owing Petitioner a total of $83,675.65. Respondent also acknowledged that he was an employee of Petitioner and that he was a beneficiary of the Ocala Employees' Retirement System and the Ocala Employees' Retirement Fund. Via the Debt Acknowledgment, Respondent assigned all rights and benefits of the Ocala Employees Retirement Fund to Petitioner as restitution for that portion of the debt owing to Petitioner, in the amount of $74,212.08. Respondent did not assign his pension benefits as restitution for $9,463.57 taken from the City of Ocala Employees Emergency Relief Fund and Respondent continues to owe that debt.

Section 112.3173, Florida Statutes (1995) makes mandatory the forfeiture of all rights and benefits under any public retirement system when a public employee is convicted of a specified offense committed prior to retirement. It was against public policy to "allow" Respondent to assign his pension benefits to pay restitution to Petitioner because forfeiture of said pension benefits is mandatory. The Debt Acknowledgment was void because it was contrary to public policy. Therefore, Petitioner withdrew from the Debt Acknowledgment on November 11, 1997, by adopting Resolution 98-14.

2/ See Debt Acknowledgment referenced above in Endnote No. 1.

COPIES FURNISHED:

William H. Phelan, Jr., Esquire Bond, Arnett and Phelan, P.A. Post Office Box 2405

Ocala, Florida 34478

Cary Hays

1036 Northeast 14th Street Ocala, Florida 34470

H. Lee Dehner, Esquire

2975 Bee Ridge Road, Suite C Sarasota, Florida 34239

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 97-002720

Orders for Case No: 97-002720