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Miami

Cypen & Cypen
NEWSLETTER
for
JULY 6, 2006

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. DENIAL OF PRIOR APPLICATION DOES NOT BAR ALL LATER CLAIMS RAISED BY FRS MEMBER:

In 2002 Shelkofsky, a member of the Florida Retirement System, applied for permanent and total disability as a result of an in-line-of-duty accident or injury. The State Retirement Commission concluded that Shelkofsky’s disability arose primarily from an unrelated accident, and denied his request. In doing so, the Commission explicitly did not decide whether Shelkofsky suffered a permanent and total disability. The Commission further determined that Shelkofsky was not vested because he had only eight years of creditable service at time of the application (rather than the ten years then required). In 2003 Shelkofsky reapplied for in-line-of-duty disability benefits based upon “new medical evidence” that was not considered by the Commission at the initial proceeding. He also asserted that due to his now eleven years of creditable service, his application also should be considered for regular disability benefits. The Commission dismissed the reapplication with prejudice as barred by res judicata. On appeal, the District Court held that the Commission properly dismissed the reapplication on res judicata grounds as to the issue of in-line-of-duty benefits. However, the higher court also held that the doctrine does not apply to the issues of whether Shelkofsky was currently vested in the retirement system and whether he was permanently and totally disabled. If an employee is determined to be totally and permanently disabled, but is denied in-line-of-duty disability benefits for other reasons, he shall receive regular disability benefits, if eligible. A member shall be considered totally and permanently disabled if, in the opinion of the administrator, he is prevented, by reason of a medically determinable physical or mental impairment, from rendering useful and efficient service as an officer or employee. Thus, although all indications are that the Commission would have found Shelkofsky not permanently and totally disabled, the fact remains that such issue has not been decided. Shelkofsky v. Division of Retirement, 31 Fla. L. Weekly D1663 (Fla. 1st DCA, June 20, 2006).

2. FLORIDA PROCEDURE, RATHER THAN FEDERAL PROCEDURE, APPLIES IN STATE ERISA CASE:

Smythers filed a suit against Kirk for claims arising under the Employment Retirement Income Security Act. After Kirk prevailed, he served a motion for attorney’s fees, raising for the first time a claim therefor under ERISA. After the trial court awarded fees to Kirk, Smythers appealed, alleging that Kirk had waived his right to seek fees by failing to plead an entitlement to fees in his answer or defenses in the first place. Kirk contended that his fee claim was substantive under ERISA, that ERISA preempts state law and that ERISA does not require a claim for fees to be asserted in a pleading. He also argued that the Federal Rules of Civil Procedure should be followed, which rules do not require one to plead entitlement to fees. The District Court of Appeal reversed. Although ERISA grants authority to award attorney’s fees, it does not address the procedural aspects of making and pursuing a fee claim. The requirement to plead a claim for attorney’s fees is a procedural requirement that serves to put the other party on notice of the claim. Notice of the claim is an element of procedural due process. The Federal Rules of Civil Procedure govern procedure in the United States District Courts. The Florida Rules of Civil Procedure, on the other hand, govern civil actions in the circuit courts and county courts of Florida. Thus, applying Florida law, the court held that Kirk had failed to comply with the pleading requirements of the Florida Rule, and reversed the award of attorney’s fees. Smythers v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania, 31 Fla. L. Weekly D1603 (Fla. 2d DCA, June 14, 2006).

3. POLICE OFFICER DISABILITY PENSION NOT SUBJECT TO EQUITABLE DISTRIBUTION UPON DISSOLUTION OF MARRIAGE:

Rumler, a City of Homestead police officer, retired on a service-incurred disability pension. Because his accrued normal retirement benefit was less than forty-two percent of the average monthly compensation at retirement, Section 185.18(5), Florida Statutes, mandated a pension of forty-two percent. In the subsequent dissolution of marriage action, the trial judge concluded that Rumler’s entire pension was a marital asset. On appeal, the appellate court reversed because the trial court failed to determine what portion of the pension represented compensation for pain and suffering, disability and disfigurement, and what portion, if any, represented retirement pay. Only the retirement portion is subject to equitable distribution. The court reasoned that the “accrued retirement benefit portion,” if any, of the husband’s disability pension, is actually deferred compensation, which the court can equitably distribute. If the deferred compensation portion is less than the minimum disability retirement benefit of forty-two percent of average compensation, the difference is a disability benefit not subject to equitable distribution. Recognizing that a municipal pension is not subject to equitable distribution by a qualified domestic relations order (see C&C February, 1997, Special Supplement), the final judgment directed Rumler to pay a portion of his pension to the wife as alimony. The appellate court reaffirmed the trial court’s broad, discretionary authority to do equity between the parties: the court is entitled to devise a remedy through other means to safeguard the former wife’s interest in the pension, which is rightfully hers, and to insure she receives the funds which are hers. The trial court has power to employ some other distribution method, although these are cumbersome devices and costly. And although there ought to be a better remedy, such changes are best left to the Legislature. (At bottom, the district court reversed the award of alimony because the trial court did not make the required statutory findings.) If the trial court determines, on remand, that some portion of Rumler’s pension is a disability benefit excluded from distribution, it may reconsider the total distribution and alimony scheme contemplated by the original final judgment in order to arrive at a just result. Rumler v. Rumler, 31 Fla. L. Weekly D1733 (Fla. 2d DCA, June 28, 2006).

4. FLORIDA WORKERS’ COMPENSATION LAW DOES NOT ELIMINATE COMMON LAW ACTION FOR INTENTIONAL TORTS:

Thristino brought a survival action on behalf of his deceased wife against her employer and the carrier hired to handle workers’ compensation claims. The action sought damages for intentional and purposeful deprivation of necessary care and services prescribed by her physicians. The trial court dismissed the complaint with prejudice, relying upon the mandate of a Florida appellate case. Subsequently, that case was quashed, leaving the door open for reinstatement of the subject case, which was ordered by the appellate court. The appellate court emphasized that the workers’ compensation law does not eliminate common law actions for intentional torts. An insurance carrier that utilizes the process of administering benefits intentionally to injure a worker is not afforded immunity. Only injuries that occur within the system, “workplace injuries,” are covered under the Workers’ Compensation Law, not injuries intentionally inflicted by an insurance carrier during the claims administration process. Well said. Thristino v. Crawford & Company, 31 Fla. L. Weekly D1761 (Fla. 4th DCA, June 28, 2006).

5. NEW YORK GOVERNOR FACES PENSION DECISIONS:

According to the New York Sun, dozens of bills making retirement benefits more generous for a wide range of public employees are awaiting Governor George Pataki’s signature or veto. One of the bills will enable more government workers to retire at half their top salaries, with regular cost of living increases. The measures would raise benefits for at least tens of thousands of government employees, from investigators working for Attorney General Eliot Spitzer, to security workers at mental hospitals, to school teachers. The costliest of the bills would lower retirement age for certain workers to 55 and ease eligibility requirements for opting into more lucrative retirement plans that are reserved for more experienced employees. Lawmakers defend the bills as justified assistance for employees in the most difficult jobs and as a way to rectify imbalances in the system favoring certain groups over others. (All the bills passed both the Democrat-controlled Assembly and the Republican-controlled Senate with overwhelming majorities.) This year, concerns in Albany over escalating pension costs have taken a back seat to efforts to ease property tax burdens on home owners and curb Medicaid fraud. Mr. Pataki, who earlier in his third term frequently raised the issue of pension costs, has barely mentioned the subject in recent speeches.

6. CEOS SHELL OUT ALMOST SIX FIGURES FOR PERFECT NANNY:

According to USA Today, millions of families face upheaval caused by child care issues. Rich, poor and the middle-class dream of Mary Poppins or Mrs. Doubtfire. Few find the dream nanny, but just about everyone experiences a child care nightmare at one time or another. CEOs are no exception. They are not insulated from a nanny gone sour, and their combination of anxiety and wealth is driving annual salaries of the best-paid nannies toward $100,000. (“There are people in Boston with law degrees who make less than some nannies.”) Salaries of top nannies are not the only thing being driven by the CEOs search. Those at the high end also get benefits such as health insurance, meals at fine restaurants, country club passes, cars with free gasoline, educational stipends, cell phones, working trips aboard corporate jets and personal trips compliments of the CEO’s frequent-flyer miles. All that, plus room and board in a mansion, can make leaving the professions a lifestyle decision. Why are high-end nannies so special? It starts with education. CEOs want college-educated nannies with degrees in fields such as education, nursing and child psychology, and are willing to pay for it. Why do college-educated women become nannies? For one, at the high end the money is comparable to, or better than, teaching. Plain educators often find more satisfaction in development of two or three children over several years than they do facing a fresh crop of thirty students every fall. In addition to college degrees, many high-end nannies know how to swim, are certified in CPR and regularly attend nanny seminars to hone their skills. Most at the high end have been through exhaustive background checks and psychological exams. Most nannies to CEOs sign confidentiality agreements never to discuss their families in detail. (Movie stars like Angelina Jolie may be the most famous employers of nannies; but celebrities often prefer nannies who do not speak English because they do not want bathrobe secrets breaking in the National Enquirer.) Some nannies home-school younger children, a growing trend among high-end nannies. Other nannies are starting to specialize, say, just taking care of twins or newborns. Being a high-end nanny, however, is not an easy life. Sixty-hour weeks are typical and nannies often must work on Christmas and Thanksgiving. Gee, what a shame. All we can say is supercalifragilisticexpialidocious.

7. ARE YOU READY FOR THE “RETIREMENT RED ZONE?”:

Americans are living longer -- and living in retirement longer -- than at any other time in our country’s history. As Baby Boomers approach retirement age, they are expected to reinvent the whole notion of retirement living. Yet how does one fund a retirement that could last 20 or 30 years or more? Prudential Financial has identified the “Retirement Red Zone,” a time period defined as the five years before and five years after retirement, as a particularly important window for Americans to strengthen their retirement savings to protect against the financial risks associated with unpredictable events which has inflation, health problems or a decline in the stock market. A recent study provides insights into Americans’ financial concerns in the Retirement Red Zone, their current investment behaviors and how those behaviors might change given new knowledge about risks and solutions. The following are some of those findings:

  • Over 7 in 10 Americans recognize that financial risks are different in the Retirement Red Zone, and might require a different approach to planning and investing.
  • But many may not be sure how to think about the situation: 50% think the greater investment risk in their Retirement Red Zone is investing too conservatively. The other 50% think the greater risk is investing too aggressively.
  • 63% were not aware of the long-term impact of investment losses experienced in the Retirement Red Zone.
  • If faced with an investment loss just before or early in retirement that materially impacted the value of their nest egg, 41% said they would expect to keep working or return to work.
  • 34% would reduce their lifestyle, while 25% would depend on a stock market rebound.
  • Women were more likely than men to be concerned about inflation eroding their retirement buying power (82% vs. 72%) or simply not having enough income to live on (59% vs. 50%).

The study polled over 1,000 Americans, about half of whom were within five years of expected retirement and the other half of whom had retired within the last five years.

8. WHAT TRIGGERS BEGINNING OF 180 DAY-PERIOD FOR AGENCY TO COMPLETE INVESTIGATION OF COMPLAINT AGAINST FLORIDA LAW ENFORCEMENT OFFICER?:

Part VI of Chapter 112, Florida Statutes, is commonly known as the “Law Enforcement Officers’ Bill of Rights.” A law enforcement officer is granted specific rights when under investigation and subject to interrogation by members of his agency for any reason that could lead to disciplinary action, demotion or dismissal. No disciplinary action may be taken or punishment given unless the officer is notified of the action and the reason for the action prior to the effective date of such action. During the 2005 legislative session, Chapter 112, Florida Statutes, was amended to place a limitation on the time in which an investigation must be completed: investigations must be completed within 180 days after the date the agency receives notice of the allegation by a person authorized by the agency to initiate an investigation of the misconduct. Every law enforcement agency is required by statute to establish and put into operation a system for receiving, investigating and making determinations of complaints received by the agency from any person. The statute, however, does not specify who in the agency must receive the complaint; in requiring that the system provide for receipt of complaints, the law enforcement agency would necessarily have to make such a designation. Further, the statute contains four very specific circumstances that will toll the 180-day time limit on the investigation of a law enforcement officer. Inability of internal affairs to conduct its investigation is not one of them. AGO 2006-25 (June 29, 2006).

9. FLORIDA POLICE CHIEF MAY NOT SIMULTANEOUSLY SERVE AS ACTING CITY MANAGER:

Article II, Section 5(a), Florida Constitution, provides that no person shall hold at the same time more than one office under the government of the state and the counties and municipalities therein. This constitutional provision prohibits a person from simultaneously serving in more than one state, county or municipal office, regardless of whether elected or appointed. Upon resignation of the chief to accept position as acting city manager, a vacancy is created in the office of police chief, not a leave of absence. Nothing would preclude the city from reappointing the current acting city manager as police chief when he no longer is serving as city manager. In addition, a judicially-created exception to dual office holding when both offices are related to criminal investigation or prosecution does not apply. That exception is clearly inapplicable to exercise of governmental power or performance of official duties on a disparate board or position. AGO 2006-26 (June 29, 2006).

10. QUOTE OF THE WEEK:

“Ethics is knowing the difference between what you have a right to do and what is the right thing to do.” United States Supreme Court Justice Potter Stewart

Copyright, 1996-2006, all rights reserved.

Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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