Town of Miami Lakes v. State

368 So.3d 499

TOWN OF MIAMI LAKES, Appellant, v. State of Florida, DEPARTMENT OF MANAGEMENT SERVICES, etc., Appellee.

No. 3D22-672

District Court of Appeal of Florida, Third District.

Opinion Filed July 26, 2023

Llopiz Wizel LLP, and Joan Carlos Wizel and Onier Llopiz (Fort Lauderdale), for appellant.

Clark N. Gates, Assistant General Counsel, and Olorunfunmi Ojetayo, Deputy General Counsel (Tallahassee), for appellee.

Before EMAS, FERNANDEZ, and HENDON, JJ.

HENDON, J.

The Town of Miami Lakes ("the Town") appeals from a Final Order entered by the Department of Management Services ("DMS"), adopting the Administrative Law Judge's ("ALJ") Recommended Order, requiring that the Town repay to DMS the retirement benefits it paid to one of its employees. We affirm.

The Florida Retirement System ("FRS") is a retirement program offered to state and local government employees governed by chapter 121, Florida Statutes and Title 60S, Florida Administrative Code. Members of FRS may elect to participate in a program known as the Deferred Retirement Option Program ("DROP"), which allows for the member to defer the receipt of their retirement benefits while continuously working for the FRS employer. § 121.091(13)(a), Fla. Stat. (2018) A member is eligible to participate in the DROP program if they are employed and work in a "regularly established position." Id. A regularly established position "is an employment position which will be in existence beyond 6 consecutive calendar months...." Fla. Admin. Code R. 60S-1.004(4)(b).

A member of FRS who wishes to seek employment after retirement is subject to the limitations set forth in section 121.091. That statute provides that "a retiree may not be reemployed with an employer participating in the Florida Retirement System until such person has been retired for 6 calendar months." § 121.091(9)(d) 1., Fla. Stat. (2018). The reemployment limitations state that if the member is employed by an FRS employer within the first six (6) months of retirement, in violation of the prohibition, both the member and the FRS employer will be held jointly and severally liable for the retirement benefits that were paid to the member. § 121.091 (9)(b)(1), Fla. Stat. (2018).

Ms. Dawn Jenkins ("Ms. Jenkins") was a Miami-Dade Public School teacher for forty years before her retirement on June 8, 2018. Ms. Jenkins was enrolled in the DROP program and began receiving her monthly retirement benefits immediately upon termination of her employment status. At that time, DMS put Ms. Jenkins on notice that she would have to "terminate all employment relationships with all participating FRS employers for the first 6 calendar months after the DROP termination date." FRS requires employers to submit monthly reports to the Department's Division of Retirement for the purpose of tracking wages, retirement contributions, and years of service. If the monthly reports include a recent retiree, an investigation will ensue to ensure that retirement contributions are not made to the employee.

Two months after her official retirement, Ms. Jenkins filled out an employment application to be a yoga instructor for the Town, to temporarily fill in for the Town's regular instructor who was on medical leave. Ms. Jenkins received and accepted the Town's offer of employment for the position of "Back Up Part-Time Instructor, Yoga." The Town's offer letter included the statement that the position is an FRS-covered position and that a percentage of pay would be withheld for retirement. Ms. Jenkins was hired by the Town to serve as its senior yoga instructor, and was paid $26 an hour. The Town's personnel action forms identified Ms. Jenkins’ employment as part-time and non-exempt, and checked "FRS" under Benefits. For the sixteen yoga classes Ms. Jenkins taught, the Town sent her an IRS W-2 wage and tax statement.

As an FRS employer, the Town sent its required monthly report to the Department's Division of Retirement, which triggered an investigation of Ms. Jenkins’ employment as a violation of the statutory reemployment prohibition under Chapter 121, Florida Statutes. Despite the Town's attempts to remedy the situation, DMS found Ms. Jenkins in violation of the reemployment prohibition and ultimately settled the matter with her. The settlement agreement required Ms. Jenkins to repay the money owed to the FRS Trust Fund through monthly deductions from her retirement benefits. The settlement agreement also obligated DMS, to in good faith, seek reimbursement for the entire debt from the Town. The settlement agreement provided that if DMS was able to recover the entire amount from the Town, DMS would cease the monthly deductions, notify Ms. Jenkins, and refund her the deductions withheld. The Department issued a Notice of Intended Agency Action letter against the Town on October 2, 2020, informing the Town that it was jointly and severally liable for the repayment of Ms. Jenkins’ retirement benefits in accordance with section 121.091(9)(c) 3., Florida Statutes.

The Town requested an administrative hearing before an ALJ at the Department of Administrative Hearings. After hearing testimony of several witnesses, the ALJ issued a recommended order, finding that the Town employed Ms. Jenkins...