STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MARY L. COYLE,

Petitioner,

vs.

DEPARTMENT OF MANAGEMENT SERVICES, DIVISION OF RETIREMENT,

Respondent.

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) Case No. 05-3145

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RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case on November 9, 2005, in Clearwater, Florida, before Lawrence P. Stevenson, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Theodore Triantafilu

Qualified Representative 807 Warren Road

Lutz, Florida 33548

For Respondent: Thomas E. Wright, Esquire

Department of Management Services Division of Retirement

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

Whether Petitioner is entitled to receive continuing retirement benefits as a joint annuitant of her late husband, Raymond Coyle.

PRELIMINARY STATEMENT

By letter dated February 18, 2005, Respondent Department of Management Services, Division of Retirement (the "Division") advised Petitioner, Mary L. Coyle, that it had no authority to pay her a benefit from the account of her late husband, Raymond Coyle, because Mr. Coyle did not change his designation of joint annuitant to her name prior to his death. The denial letter relied upon Section 121.091, Florida Statutes (2005), and stated that it constituted final agency action against which Petitioner could appeal by way of a formal hearing before the Division of Administrative Hearings.

Petitioner disputed the denial and, on or about March 2, 2005, timely requested an administrative hearing. The request for hearing was not forwarded to the Division of Administrative Hearings until August 30, 2005. A final hearing was scheduled for November 9, 2005.

At the final hearing, Petitioner requested that her son, Theodore Triantafilu, be allowed to act as her Qualified Representative. Respondent did not object to the request, which was granted. Petitioner testified on her own behalf and

presented the testimony of Mr. Triantafilu. Petitioner's Exhibits numbered 1 through 11 were admitted into evidence. Respondent presented the deposition testimony of one witness, Ms. Stanley Colvin. Respondent's Exhibits numbered 1, 2, 5, 6,

8 and 9 were admitted into evidence.

Official recognition was taken of Section 121.091, Florida Statutes (2005).

No transcript was ordered. The parties stipulated that their proposed recommended orders would be filed on November 28, 2005. Both parties timely filed Proposed Recommended Orders, which have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Subsection 121.091(6), Florida Statutes (2005), requires retiring members of the Florida Retirement System (FRS) to choose one of four benefit options, as follows, in relevant part:

   1. Prior to the receipt of the first monthly retirement payment, a member shall elect to receive the retirement benefits to which he or she is entitled under subsection (1), subsection (2), subsection (3), or subsection (4) in accordance with one of the following options:

1. The maximum retirement benefit payable to the member during his or her lifetime.

2. A decreased retirement benefit payable to the member during his or her lifetime and, in the event of his or her death within a period of 10 years after retirement, the same monthly amount payable for the balance of such 10-year period to his or her beneficiary or, in case the beneficiary is deceased, in accordance with subsection (8) as though no beneficiary had been named.

   
   

3. A decreased retirement benefit payable during the joint lifetime of both the member and his or her joint annuitant and which, after the death of either, shall continue during the lifetime of the survivor in the same amount, subject to the provisions of subsection (12).

   
   

4. A decreased retirement benefit payable during the joint lifetime of the member and his or her joint annuitant and which, after the death of either, shall continue during the lifetime of the survivor in an amount equal to 66 2/3 percent of the amount that was payable during the joint lifetime of the member and his or her joint annuitant, subject to the provisions of subsection (12).[1]

* * *

(d) A member who elects the option in subparagraph (a)3. or subparagraph (a)4. shall, on a form provided for that purpose, designate a joint annuitant to receive the benefits which continue to be payable upon the death of the member. After benefits have commenced under the option in subparagraph (a)3. or subparagraph (a)4., the following shall apply:

1. A retired member may change his or her designation of a joint annuitant only twice. If such a retired member desires to change his or her designation of a joint annuitant, he or she shall file with the

   division a notarized "change of joint annuitant" form and shall notify the former joint annuitant in writing of such change. Effective the first day of the next month following receipt by the division of a completed change of joint annuitant form, the division shall adjust the member's monthly benefit by the application of actuarial tables and calculations developed to ensure that the benefit paid is the actuarial equivalent of the present value of the member's current benefit. The consent of a retired member's first designated joint annuitant to any such change shall not be required. However, if either the member or the joint annuitant dies before the effective date of the request for change of joint annuitant, the requested change shall be void, and survivor benefits, if any, shall be paid as if no request had been made. (emphasis added)

   
   

2. Petitioner, Mary L. Coyle, is the surviving spouse of Raymond Coyle, a regular class member of the FRS who began drawing "Option 4" service retirement benefits on March 1, 1993.

3. At the time of his retirement, Mr. Coyle was married to his first wife, Melva Coyle, who was named as his joint annuitant for purposes of Option 4 of the FRS.2

4. On June 28, 1998, Melva Coyle died. As set forth above, under Option 4 of the FRS, the retirement benefit is reduced by one-third when either the member or the joint annuitant dies. Thus, upon his wife's death, Mr. Coyle's benefit was reduced by one-third.

5. If an Option 4 FRS member such as Mr. Coyle remarries, and designates his new spouse as his joint annuitant, then the

   benefit is recalculated. Then, upon the death of the member or the new joint annuitant, the benefit is again reduced by one- third.

6. The Division sent Mr. Coyle a letter, dated October 23, 1998, to memorialize the reduction in Mr. Coyle's retirement benefit and to seek the refund of an overpayment made during the interim between his wife's death and the Division's receiving notice of her death. The letter included the following language:

   Since your joint annuitant has predeceased you, there will not be a continuing benefit upon your death unless you remarry or acquire a financial dependent and wish to provide for that person. Please contact us at that time concerning the information needed. Your benefit would be recalculated the month such change is made.

   
   

7. On December 1, 1998, Petitioner married Mr. Coyle.

   
   

8. On June 23, 1999, Mr. Coyle telephoned the Division and spoke to an employee identified in the record only as "Jorri." In her written record of the call, on a form called a "Survivor Benefits Information Sheet," Jorri wrote that Mr. Coyle wanted to find out whether the Division had received his check for the overpayment on his account. Jorri further wrote: "Mr. Coyle also requested a JA change to his new spouse, Mary Louise. Her DOB is 03-25-27 and SSN is [number]."

9. On a Survivor Benefits Information Sheet dated November 19, 1999, another Division employee wrote:

   Mr. Coyle's wife died June 1998. He has told us many times that we had the check for the overpayment. On Tuesday, Chris came over and said that she had just told [sic] to him about a check that Janice Lowe had for several months because she did not know what to do with it.

   
   

   It first came to the division, but to the wrong area. Then it was sent to State Health because whoever received it thought it was payment for insurance.

   
   

   When Chris got the check on Tuesday, she mailed it back to Mr. Coyle.

   
   

   I called him on Tuesday and told him that we did indeed need the payment that he had sent. He said that when he got the check he would send another dated the day that he would send it.

   
   

   We will then let him know that we got the payment and send the information about a JA change. I went over the fact that the benefit would probably drop at the time of the JA change and then also drop another 1/3 if one of them dies. He is not sure about the change. (emphasis added)

   
   

10. On February 10, 2000, Michele Whitfield of the Division's survivor benefits section sent a letter to Mr. Coyle showing the recalculated benefit that he could expect to receive if he named Petitioner as his joint annuitant. The letter showed that Mr. Coyle was currently receiving a gross monthly benefit of $447.32, and that it would be reduced to $370.30 if he named Petitioner as his joint annuitant. Ms. Whitfield's

    letter informed Mr. Coyle that he must file the following documents to change his joint annuitant: proof of birth of the new joint annuitant; a copy of his marriage certificate; and Form JA-1, the joint annuitant change form.

11. Petitioner testified that Mr. Coyle never received the letter from Ms. Whitfield. Mr. Coyle was a 100 percent disabled veteran, and was in poor health during the time of his correspondence with the Division. In December 1999, Mr. Coyle was sent to a nursing home by the Veterans Administration. Petitioner moved back to her condominium in Dunedin, and had her mail forwarded to that address. Mr. Coyle's mail was forwarded to the nursing home. Ms. Whitfield's letter was not received by Petitioner or Mr. Coyle at either address.

12. The Division was not aware that Mr. Coyle did not receive the letter informing him of the steps he must take to change his joint annuitant. It had sent the letter to the same address it had sent all previous correspondence, which was the same address shown on the overpayment checks sent to the Division by Mr. Coyle.

13. Obviously, the Division never received a completed joint annuitant change form from Mr. Coyle. The Division never followed up on the matter following its February 10, 2000, letter to Mr. Coyle, having assumed that Mr. Coyle's silence

    indicated his decision not to change joint annuitants in order to maintain his current level of monthly benefits.

14. Petitioner testified that Mr. Coyle assured her that he had changed his joint annuitant for his Option 4 retirement benefits, and that he had made her his beneficiary on his state life insurance policy.

15. Mr. Coyle died on December 7, 2004. On February 4, 2005, Petitioner received the death benefit from Mr. Coyle's state life insurance policy. This fact demonstrates that

    Mr. Coyle did make Petitioner his beneficiary on his state life insurance policy, but does not demonstrate that Mr. Coyle changed his joint annuitant for his Option 4 retirement benefits. As indicated above, Petitioner produced no evidence that Mr. Coyle ever took the steps necessary to make Petitioner his joint annuitant for his Option 4 retirement benefits.

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction over the parties to and subject matter of this proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2005).

17. The FRS was created by the Legislature in 1970 and is codified at Chapter 121, Florida Statutes (2005).

18. Petitioner has the burden of providing sufficient evidence to support her case. The burden of proof in an administrative proceeding is on the party asserting the

    affirmative of the issue unless the burden is otherwise established by statute. Young v. State, Department of Community

    Affairs, 567 So. 2d 2 (Fla. 3rd DCA 1990); Florida Department of Transportation v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981); Balino v. Department of Health and Rehabilitative Services, 348 So. 2d 349 (Fla. 1st DCA 1977).

19. Subsection 121.091(6)(d)1., Florida Statutes (2005), requires that a retired member must "file with the division a notarized 'change of joint annuitant' form" in order to change his designation of joint annuitant. Petitioner presented evidence that Mr. Coyle twice inquired about changing his designation of joint annuitant. This evidence might be sufficient to permit an inference that Mr. Coyle intended to make the change, but is not sufficient, standing alone, to support an inference that Mr. Coyle in fact made the change in the fashion required by the statute.

20. There is precedent for the application of equitable estoppel against the Division in matters relating to retirement benefits. Rayborn v. Department of Management Services, Division of Retirement, 803 So. 2d 747 (Fla. 3rd DCA 2001); Kuge v. Department of Administration, Division of Retirement, 449 So. 2d 389 (Fla. 3rd DCA 1984). The Rayborn court set forth the elements of equitable estoppel as follows:

    1. a representation by the party estopped to the party claiming the estoppel as to some material fact; (2) which representation is contrary to the condition of affairs later asserted by the estopped party; (3) a reliance upon the representation by the party claiming the estoppel; and (4) a change in the position of the party claiming the estoppel to his detriment, caused by the representation and his reliance thereon.

       
       

       803 So. 2d at 748-749.

       
       

21. In this case, Petitioner has not established the elements of equitable estoppel. The Division made no representation to Mr. Coyle or Petitioner as to a material fact that was contrary to a later asserted condition of affairs. Petitioner did not rely on any representation made by the Division; rather, she relied upon the representation of

Mr. Coyle that he had changed his joint annuitant. Unfortunately, Mr. Coyle had not taken the steps required by statute to make an effective change in the joint annuitant.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law set forth herein, it is

RECOMMENDED that the Department of Management Services, Division of Retirement, enter a final order denying Petitioner's request for Option 4 FRS benefits as a joint annuitant to Raymond Coyle.

DONE AND ENTERED this 14th day of February, 2006, in Tallahassee, Leon County, Florida.

S

LAWRENCE P. STEVENSON

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 14th day of February, 2006.

ENDNOTES

1/ Subsection 121.096(12), Florida Statutes (2005), deals with survivor benefits under circumstances inapplicable to this case.

2/ Subsection 121.021(28), Florida Statutes (2005), provides, in relevant part:

"Joint annuitant" means any person designated by the member to receive a retirement benefit upon the member's death who is:

(a) The spouse of the member . . .

COPIES FURNISHED:

Thomas E. Wright, Esquire Department of Management Services Division of Retirement

4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

Theodore Triantafilu 807 Warren Road

Lutz, Florida 33548

Sarabeth Snuggs, Director Division of Retirement

Department of Management Services Post Office Box 9000

Tallahassee, Florida 32399-9000

Steven Ferst, General Counsel Department of Management Services 4050 Esplanade Way

Tallahassee, Florida 32399-0950

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: 05-003145

Orders for Case No: 05-003145