STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ANNE MADDOX,

vs.

Petitioner,

Case No. 17-1434

DEPARTMENT OF MANAGEMENT SERVICES, DIVISION OF RETIREMENT,

Respondent.

/

RECOMMENDED ORDER

A final hearing was held in this matter before Robert S. Cohen, Administrative Law Judge with the Division of Administrative Hearings (“Division”), on August 1, 2017, by video teleconference at sites located in Tampa and Tallahassee,

Florida.

APPEARANCES

For Petitioner: Anne L. Maddox, pro se

1579 Jeffords Street

Clearwater, Florida 33756-4408

For Respondent: Thomas E. Wright, Esquire

Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue in this case is whether Daniel Maddox, a deceased retiree in the Florida Retirement System Pension Plan, selected Option 1 (maximum retiree’s monthly benefit without any spousal benefit after death of the retiree) or Option 2 (a reduced retiree’s monthly benefit with continued spousal benefit after death of the retiree, if within a period of ten years after retirement for the balance of the ten-year period).

PRELIMINARY STATEMENT

Daniel Maddox was a vested regular class member of the Florida Retirement System (“FRS”). In June 2015, he retired from FRS on early retirement due to illness. When Mr. Maddox applied for retirement, he provided the Department of Management Services, Division of Retirement (“Respondent” or “Division of Retirement”) an unexecuted form choosing Option 2, a reduced benefit which lasts for the lifetime of the member, but if the member should die before the payment of the first 120 payments, the remainder of the first 120 benefit payments would be made to the designated beneficiary. After being notified the form was incomplete, due to the lack of a notarized signature, Mr. Maddox supplied Respondent with an executed form choosing Option 1, a lifetime benefit with no continuing benefit after death.

Following his death in December 2016, his benefit payments ceased. Petitioner contacted Respondent and requested

Mr. Maddox’s Option 2 benefit. After investigation, Respondent denied her request.

Petitioner timely filed a Petition for the Denial of Benefits and the Request for an Administrative Hearing on February 15, 2017 (received by the Department on February 3, 2017). The matter was referred to the Division on March 8, 2017. The matter was assigned to Administrative Law Judge Robert S. Cohen to preside over this matter.

On March 14, 2017, a Joint Response to the Initial Order was filed, and a hearing was scheduled in this matter for May 23, 2017, by video teleconference at sites located in Tampa and Tallahassee, Florida.

On May 16, 2017, Petitioner filed Petitioner’s Request for Continuance of Hearing, and the continuance was granted. An Order Rescheduling Hearing by Video Teleconference setting the final hearing for June 21, 2017, was issued on May 30, 2017. On June 13, 2017, Petitioner filed her Second Request for Continuance to Obtain Counsel of Records, which was granted. The hearing was reset for August 1, 2017, and it proceeded to hearing as scheduled.

At the final hearing, Petitioner testified on her own behalf and offered Exhibits 1 through 6, all of which were admitted into evidence. Respondent presented the testimony of David Heidel,

Benefits Administrator with Respondent; and offered Exhibits 3 and 4, which were admitted into evidence.

The hearing was recorded, but not transcribed. The parties agreed to submit their proposed recommended orders on August 18, 2017. Petitioner and Respondent timely submitted their Proposed Recommended Orders on August 18, 2017.

References to statutes are to Florida Statutes (2016), unless otherwise noted.

FINDINGS OF FACT

1. Daniel Maddox was an employee of Pinellas County and a vested member of FRS.

2. Petitioner is Mr. Maddox’s wife.

   
   

3. Mr. Maddox retired under the early retirement provisions of FRS in June 2015, and received benefits until his death in December 2016.

4. When Mr. Maddox applied to retire, he submitted an application that included an unexecuted option selection form that had a mark by Option 2.

5. After being notified of the deficiency on two occasions by Respondent, Mr. Maddox submitted an executed option selection form on July 30, 2015, on which he selected Option 1.

6. Option 1 provides the maximum benefit for the life of the member of FRS with no continuing benefit after the member’s death.

   
   

7. Option 2 provides a reduced benefit for the lifetime of the member of FRS, but should the member die before 120 payments have been made, the remainder of the first 120 payments will be made to the member’s designated beneficiary.

8. Petitioner signed a Spousal Acknowledgement Form acknowledging that Mr. Maddox selected either Option 1 or 2, rather than an Option 3 benefit, which would have provided a lifetime reduced benefit for her.

9. Mr. Maddox’s signature on the Option Selection for FRS Members form selecting Option 1 was properly notarized.

10. The purpose of the Spousal Acknowledgement Form is to inform the spouse that he/she will not be receiving a lifetime benefit. It does not give control over which option the FRS member selects. That decision is the sole choice of the member.

11. Petitioner testified that she and her husband completed the forms together, with Mr. Maddox selecting Option 2 since he was disabled at the time and on medication. Mr. Maddox took the forms to their bank to have them notarized, but returned without the Option Selection for FRS Members form notarized.

12. While Mr. Maddox was taking his forms to the bank for execution, Petitioner executed the Spousal Acknowledgement Form in the presence of a notary and submitted it to Respondent. She believed her husband had executed the required forms and selected

    
    

    Option 2. Her testimony concerning this sequence of events is credible.

13. Mr. Maddox received a letter entitled “Acknowledgement of Service Retirement Application” from Respondent dated May 15, 2014. That letter confirmed that Option 2 had been selected and included an Estimate of Retirement Benefits spreadsheet. Based upon this letter, Petitioner believed that her husband had selected Option 2 and that the selection was in force.

14. The Acknowledgement of Service Retirement Application, stating that Option 2 had been selected, required two additional pieces of information from Mr. Maddox: verification of his birthdate; and a notarized Option Selection for FRS Members form, since the one that was submitted (selecting Option 2) had not been executed.

15. When Mr. Maddox submitted the notarized Option Selection form, he had selected Option 1. Respondent relied upon the executed selection in making its determination that Option 1, not Option 2, had been selected by Mr. Maddox.

16. Respondent did not provide an additional Spousal Acknowledgement Form to Petitioner when it received the notarized form selecting Option 1 since its processing people deemed the file complete once all the required forms for retirement had been received.

    
    

17. Petitioner testified that she believed she should have been provided a new Spousal Acknowledgement Form when Mr. Maddox selected Option 1 since her acknowledgement signed previously had been executed under the impression her husband had selected Option 2 in her presence and was taking that election to the bank to be notarized.

18. She believes that a Spousal Acknowledgement Form signed several months before and based upon her husband’s election of Option 2 should have been re-sent to her since a different selection was made by Mr. Maddox. She further testified that her husband was disabled and on heavy medication and may have gotten confused when he went to the bank a second time to sign the

    selection form.

    
    

    CONCLUSIONS OF LAW

    
    

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

20. FRS is codified in chapter 121, Florida Statutes.

    
    

    Section 121.051 mandates compulsory participation in FRS for all employees hired after December 1, 1970. Section 121.021(11) defines “employee” as any person receiving salary payments for work performed in a regularly established position and, if employed by a city or special district, employed in a covered group.

    
    

21. The two benefit options at issue in this matter are found in section 121.091(6)(a):

    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.

       
       

22. Also relevant to this inquiry is section 121.091(6)(h), which provides:

    The option selected or determined for payment of benefits as provided in this section shall be final and irrevocable at the time a benefit payment is cashed or deposited or credited to the Deferred Retirement Option Program as provided in subsection (13).

    
    

23. It is undisputed that Mr. Maddox received and cashed benefit checks prior to his death in December 2016.

24. No medical evidence was presented that Mr. Maddox lacked the capacity to make a valid option selection, and Petitioner acknowledged her signature on the Spousal Acknowledgement Form, although her dispute with the acknowledgement was that she executed the form when she thought her husband had selected Option 2, not Option 1.

25. In similar cases, Respondent has denied posthumous benefit changes as requested here. See Carpenter v. Dep’t of

    
    

    Mgmt. Servs., Case No. 01-1618 (Fla. DOAH Jul. 12, 2001; Fla. DMS

    
    

    Aug. 22, 2001); Mills v. Dep’t of Mgmt. Servs., Case No. 10-9855 (Fla. DOAH Jan. 25, 2011; Fla. DMS May 3, 2011); and Jones v.

    Dep’t of Mgmt. Servs., Case No. 16-0429 (Fla. DOAH Oct. 25, 2016) (Recommended Order).

26. In this case, Petitioner has the burden to prove entitlement to Option 2 benefit payments. See Young v. Dep’t of

    Cmty. Aff., 625 So. 2d 831 (Fla. 1993); Wilson v. Dep’t of

    
    

    Admin., Div. of Ret., 538 So. 2d 139, 141-142 (Fla. 4th DCA 1989); Fla. Dep’t of Transp. v. J.W.C. Co., 396 So. 2d 778 (Fla.

    1st DCA 1981); Balino v. Dep’t of HRS, 348 So. 2d 349 (Fla. 1st DCA 1977) (unless otherwise provided by statute, the party asserting the affirmative of an issue has the burden of proof). The standard of proof is a preponderance of the evidence.

    § 120.57(1)(j), Fla. Stat.

    
    

27. Petitioner makes a sincere and compelling argument that had she known her late husband signed the form selecting

    Option 1, she would not have acknowledged that selection without having discussed the issue with him. Although reliable and competent evidence was not presented as to the extent of

    Mr. Maddox’s illness and the medications he may have been taking at the time he selected Option 1, Petitioner’s argument that she should have been given a second Spousal Acknowledgement Form addressing the selection of Option 1, resonates here. However,

    
    

    since Mr. Maddox is deceased, and since prior to his death he negotiated retirement benefits that were deposited into his bank account, his survivor has waived any opportunities she may have had to change his retirement option. While the better practice by Respondent might have been to have Petitioner sign a new acknowledgement form after the benefit was changed from Option 1 to Option 2 (despite the issue over the unsigned versus the signed form), Respondent has not violated any of the FRS statutes in proceeding as it has.

28. Based upon the foregoing, Petitioner has failed to meet her burden of proving by a preponderance of the evidence that the denial of Mr. Maddox’s Option 2 retirement benefit by Respondent violated chapter 121, or was improper.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Division of Retirement enter a final order denying Petitioner’s request for Option 2 retirement benefits on behalf of Daniel Maddox.

DONE AND ENTERED this 25th day of August, 2017, in Tallahassee, Leon County, Florida.

S

ROBERT S. COHEN

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 25th day of August, 2017.

COPIES FURNISHED:

Anne L. Maddox

1579 Jeffords Street

Clearwater, Florida 33756-4408 (eServed)

Thomas E. Wright, Esquire Office of the General Counsel

Department of Management Services 4050 Esplanade Way, Suite 160

Tallahassee, Florida 32399 (eServed)

Elizabeth Stevens, Director Division of Retirement Department of Management Services Post Office Box 9000

Tallahassee, Florida 32315-9000 (eServed)

J. Andrew Atkinson, General Counsel Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 160 Tallahassee, Florida 32399-0950 (eServed)

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: 17-001434

Orders for Case No: 17-001434