STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LETTIE L. ECHOLS,

Petitioner,

vs.

DEPARTMENT OF MANAGEMENT SERVICES,

Respondent.

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) Case No. 00-4763

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RECOMMENDED ORDER

Notice was provided, and a formal hearing was held on January 31, 2001, at the Division of Administrative Hearings, DeSoto Building, 1230 Apalachee Parkway, Tallahassee, Florida, and conducted by Harry L. Hooper, Administrative Law Judge with the Division of Administrative Hearings. Petitioner appeared telephonically.

APPEARANCES

For Petitioner: Lettie L. Echols, pro se

No. 2 Gulf Lane Coram, N.Y. 11727

For Respondent: Thomas E. Wright, Esquire

Division of Retirement Department of Management Services

Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

STATEMENT OF THE ISSUES

Whether or not Petitioner is entitled to a refund of contributions made to the Florida State Officers and Employees Retirement System from October 1952 through January 1956.

PRELIMINARY STATEMENT

Petitioner, during the year 2000, requested that the Division of Retirement (Division) refund contributions made by her to the Florida State Officers and Employee's Retirement System (SOERS) in the amount of $455.04. In a letter dated October 2, 2000, Ron Poppell, Interim Retirement Director, denied her request. In a letter dated October 10, 2000, Petitioner, requested a formal hearing.

At the final hearing, Petitioner testified on her own behalf. Respondent presented the testimony of Larry Hunnicutt, Benefits Administrator, Bureau of Retirement Calculations, of the Division. Petitioner submitted two exhibits which were admitted. Respondent submitted one exhibit which was admitted.

Petitioner requested that she be paid interest at the statutory rate on the sum she was seeking.

Statutory references are to Florida Statutes (1999), unless otherwise noted.

No transcript was filed. A Proposed Recommended Order was timely submitted by Respondent and was duly considered.

FINDINGS OF FACT

1. Petitioner was employed by the Florida A & M Hospital, Tallahassee, Florida, from October 1952 through January 1956.

2. During the course of this employment, contributions to SOERS were withheld from her monthly pay warrant.

3. On February 23, 1956, Division records reflect that she had contributed a total of $455.04 into SOERS. During January 1956 she terminated her employment.

4. On or about February 23, 1956, the sum of $455.04 was debited from Petitioner's account. This action was taken because the Florida law in effect in 1956, mandated the return of contributions made to SOERS to an employee upon termination of employment. However, evidence which might have demonstrated that a warrant was issued naming Petitioner as payee, is unavailable because cancelled warrants are only maintained on file by the Florida Comptroller for 20 years.

5. Under applicable statutes and, pursuant to Division practice at times pertinent, if a warrant had been issued, but never negotiated, the amount would have been credited back to the trust fund under Petitioner's account. Petitioner's account at the Division does not reflect such a credit. If a warrant had been issued and negotiated pursuant to a forged endorsement, and such forgery was not detected, no entries subsequent to issuance would have been made to Petitioner's account.

6. Petitioner, in January 1956, departed Tallahassee for Nuremburg, Germany, after marrying. She did not leave a forwarding address with her employer or with Respondent.

7. Petitioner ultimately became a resident of Coram, New York, where she currently resides.

8. Petitioner testified that she never received a warrant for $455.04 from the State of Florida. Her testimony was unrebutted and credible and is taken as a fact.

9. Petitioner first became aware she was entitled to a payment of $455.04 from the Division when, in the year 2000, she made inquiries regarding her eligibility for social security.

10. Petitioner has determined that the amount in question is not being held in the Unclaimed Property Bureau of the

    Florida Comptroller.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter presented herein, pursuant to Section 120.57(1), Florida Statutes.

12. The Division of Retirement is the state agency charged with the responsibility for administering the Florida Retirement System (FRS). Chapter 121, Florida Statutes.

13. In order to prevail, Petitioner had the burden of going forward with evidence that she was entitled to a refund. That having been accomplished, it became the Division's burden

    to demonstrate that she had already been paid the refund. Wilson v. Department of Administration, Division of Retirement,

    538 So. 2d 139 (Fla. 4th DCA 1989); Mamie Wilson v. Department of Administration, Division of Retirement, DOAH Case

    No. 86-2545 (1987); Mamie Wilson v. Department of

    
    

    Administration, Division of Retirement, DOAH Case No. 86-2546 (1989).

14. Section 121.08, Florida Statutes (1951), provides in part that, "Should any officer or employee leave the service of the state before accumulating aggregate time of ten years toward retirement but before being eligible to retire under the provision of this law, such officer or employee shall be entitled to a refund of one hundred percent of his contributions made to the retirement fund without interest. "

15. Pursuant to Chapter 122, Florida Statutes (1955), the State Officers and Employees Retirement System became the State and County Officers and Employees Retirement System (SCOERS).

16. Section 121.045, Florida Statutes, consolidated all existing state retirement systems into the FRS and required that the FRS assume all of the liabilities of the various other state retirement systems. This was effective in 1970. Consequently, the liability for any repayment of retirement contributions lies with the FRS.

17. There are only two possible explanations for what could have occurred in this case. One is that a debit entry was made on Petitioner's account but no warrant was issued. If this is the case, the Division still holds Petitioner's money and should remit it to her. The other is that a warrant was issued and was negotiated through an unauthorized endorsement, or that it simply went missing.

18. If a warrant was issued, the law of negotiable instruments demonstrates that Petitioner is entitled to be paid. Pursuant to Section 673.1041(11), Florida Statutes, a warrant is not subject to Article III of the Uniform Commercial Code. However, warrants have been regarded as negotiable instruments in the restricted sense of the term in that they have the quality of easy or simple transferability. They possess all of the qualities of negotiable paper except that the holder in due course doctrine does not apply to warrants. State v. Family Bank of Hallandale, 623 So. 2d 474 (Fla. 1993).

19. Section 673.3101(1), Florida Statutes, addresses the effect of issuing a certified check or cashier's check in payment for an underlying obligation. A warrant is similar to a certified check or cashier's check in that, like those instruments, it enjoys a higher status than an uncertified check. This section states that the underlying obligation to pay is extinguished when a certified check or cashier's check is

    taken. In this case there is no evidence the warrant, if there

    
    

    was a warrant, was taken or possessed by Petitioner. Therefore, the underlying obligation was not extinguished. Stated another way, the Division cannot extinguish its obligation by claiming that once a warrant was placed in the mail, the Division had forever discharged its obligation to Petitioner.

20. In Cook v. Division of Retirement, DOAH Case

    
    

    No. 97-2011 (1998), a case in which a state employee similarly sought a refund from the FRS, the Division was able to demonstrate evidence of a prior payment which was sufficient to meet their burden of proof.

21. Section 121.08, Florida Statutes (1951), under which the refund must be paid, precludes paying interest to Petitioner.

22. Section 17.26, Florida Statutes, provides a 3-year limitation on payment of warrants not presented for payment. However, in this case there is no evidence a warrant was issued. Even if it is assumed that a warrant did issue, Section 17.26, Florida Statutes, would not preclude the agency from reissuing another warrant in repayment of the underlying obligation. Op. Atty. Gen. 057-200, July 16, 1956.

23. Chapter 95, Florida Statutes, is inapplicable in this case. The FRS was holding Petitioner's money in trust for her, as a fiduciary. To the extent the statute of limitations

applies to this situation at all, the time period did not begin to run until Petitioner demanded the return of her money.

RECOMMENDATION

Based upon the Findings of Fact and Conclusions of Law, it

is

RECOMMENDED:

That the Division cause to be issued to Petitioner a warrant in the amount of $455.04.

DONE AND ENTERED this 23rd day of February, 2001, in

Tallahassee, Leon County, Florida.

HARRY L. HOOPER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of February, 2001.

COPIES FURNISHED:

Lettie L. Echols No. 2 Gulf Lane

Coram, New York 11727

Thomas E. Wright, Esquire Department of Management Services Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

Erin Sjostrom, Director Division of Retirement

Department of Management Services Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

Emily Moore, Chief Legal Counsel Division of Retirement

Department of Management Services Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560

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: 00-004763

Orders for Case No: 00-004763