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December, 2001

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. FRONT-PAY RECOVERABLE ONLY IF CLAIMANT DISCHARGED: Front-pay is an equitable remedy utilized to further the remedial purposes of federal employment discrimination statutes, by putting a claimant in the position he would have been but for the illegal discrimination. Therefore, front-pay is appropriate only when other damages awarded will not fully compensate for the injury and when there has not been a voluntary resignation. Two police officers voluntarily resigned because they were continually denied transfers to specialty assignments. Thus, an award of front-pay is permissible only if they were "constructively discharged." To claim successfully constructive discharge, one must demonstrate that working conditions were so intolerable that a reasonable person would have been compelled to resign. Discriminatory denial of a transfer or promotion cannot rise to this level. Gerry v. The City of Hialeah, 14 Fla. L. Weekly Fed. D458 (S.D. Fla., February 7, 2001).

2. FLORIDA TRIAL COURT INTERPRETS PRUDENT INVESTOR RULE: Section 518.11, Florida Statutes, is Florida's Prudent Investor Rule:

The fiduciary has a duty to invest and manage investment assets as a prudent investor would considering the purposes, terms, distribution requirements, and other circumstances of the trust. This standard requires the exercise of reasonable care and caution and is to be applied to investments not in isolation, but in the context of the investment portfolio as a whole and as a part of an overall investment strategy that should incorporate risk and return objectives reasonably suitable to the trust, guardianship, or probate estate. If the fiduciary has special skills, or is named fiduciary on the basis of representations of special skills or expertise, the fiduciary is under a duty to use those skills.

The rule goes on to say that no specific investment or course of action is, taken alone, prudent or imprudent. The rule is a test of conduct and not of resulting performance. The fiduciary has a duty to diversify the investments unless, under the circumstances, the fiduciary believes reasonably it is in the interest of the beneficiaries and furthers the purpose of the trust not to diversify. (One subsection provides that the rule may be expanded, restricted, eliminated or otherwise altered by express provisions of the governing instrument.) The case at hand involved a charitable remainder unitrust, which eventually replaced J.P. Morgan as trustee. When Morgan got wind that it was going to be replaced, it sold the assets of the account, which were invested in Common Trust Funds. As a rule, CTFs are proprietary and cannot be transferred. Upon sale, Morgan held the trust fund for two months in a cash position earning over 6.25% per annum. The trust beneficiaries sued Morgan, claiming that the CTFs should not have been sold until Morgan got official notice of its termination as trustee, and that holding cash for two months constituted a failure to diversify. A circuit judge ruled in favor of Morgan, holding there is no hard and fast rule that for every single month of a trust administration there must be diversification. A trust that is terminated or being transferred must be liquidated to cash at some point. In Re: Garth S. Russell Charitable Remainder Unitrust, 8 Fla. L. Weekly Supp. 629 (Fla. 15th Cir., July 3, 2001).

3. TERMINATION REVIEW BOARD REQUIRED TO MAKE FINDINGS: A deputy sheriff was terminated and appealed to the Hearing Review Board. That board upheld the termination, but failed to make written findings in support of its decision as required by its own rules. Such findings give the sheriff a more meaningful opportunity to reevaluate his decision, and a discharged deputy is entitled to have the benefit of them even though the sheriff has the right to reject the board's decision. An appellate panel of a Florida circuit court remanded the matter to the Hearing Review Board to make written findings of fact and permit the sheriff the opportunity to reevaluate his original termination decision. Withrow v. Neumann, 8 Fla. L. Weekly Supp. 699 (Fla. 15th Cir., August 7, 2001).

4. WORKERS' COMP JUDGE PROPERLY CALCULATED SOCIAL SECURITY OFFSET BY INCLUDING SUPPLEMENTAL BENEFITS AS "COMPENSABLE BENEFITS": Following prior district precedent, a Florida District Court of Appeal affirmed a judge of compensation claims order that calculated the Social Security offset by including supplemental benefits as "compensable benefits" in accordance with Sections 440.15(10)(a) and 440.15(1)(f)1., Florida Statutes. Also, the judge properly used the supplemental benefits payable in year claimant became totally and permanently disabled rather than year when the employer first became entitled to take Social Security Disability offset. Finally, this case does not involve an offset under Grice/Dixon (see C&C Newsletter for August, 2000, Item 13). Those cases deal with offsets under Section 440.20(14), Florida Statutes. This decision does not address whether supplemental benefits should be included in calculating the Grice/Dixon offset. Jackson v. Hochadel Roofing Co., 26 Fla. L. Weekly D1933 (Fla. 1st DCA, August 10, 2001). (The case in Item 10 does address the latter issue.)

5. RECIPIENT OF PTD WORKERS' COMP BENEFITS NOT SUBJECT TO SOCIAL SECURITY DISABILITY OFFSET UNTIL EMPLOYER TAKES IT: On the same day as the above case, the First District Court of Appeal addressed the question of when an employer's right to offset Social Security disability benefits against compensation benefits arises. Here, the employee timely completed the employer's request for Social Security disability benefits information and furnished the form to the former employer. However, the employer did not assert a Social Security disability offset until almost a year later. Reversing a judge of compensation claims decision to the contrary, the appellate court held that Section 440.15(10), Florida Statutes, requires the conclusion that a recipient of permanent total disability benefits is entitled to full benefits, the concurrent receipt of Social Security disability benefits notwithstanding, until the employer takes a Social Security disability offset, at least where the recipient has complied with a request for Social Security disability benefits information in timely fashion. Monroe v. Publix, 26 Fla. L. Weekly D1937 (Fla. 1st DCA, August 10, 2001).

6. AGGRIEVED PARTY MUST PURSUE ADMINISTRATIVE REMEDIES UNDER FLORIDA CIVIL RIGHTS ACT: Agreeing with an earlier Third District Court of Appeal decision (see C&C Newsletter for July, 2001, Item 20), the Fourth District Court of Appeal held that receipt of a "no cause" determination terminates the person's option to proceed under Section 760.11(8), Florida Statutes, and requires the person to follow Section 760.11(7), Florida Statutes, and exhaust the administrative remedy provided therein, prior to filing suit in a Florida court. Bach v. United Parcel Service, Inc., 26 Fla. L. Weekly D2095 (Fla. 4th DCA, August 29, 2001).

7. CITY NOT OBLIGATED TO ARBITRATE WHERE BARGAINING AGENT DECLINES TO PROCESS GRIEVANCE: A terminated firefighter filed a grievance under a collective bargaining agreement that provided a grievance procedure. The union conducted an independent inquiry and declined to pursue the matter to arbitration due to lack of merit. The ex-firefighter then filed directly with the city, which declined to entertain the grievance, citing the collective bargaining agreement's provision giving the union control of the grievance process. The lower court compelled arbitration, and the appellate court reversed: "Where a certified bargaining agent retains contractual control over the arbitral step of the grievance procedure and it declines to process a grievance to arbitration because it believes the grievance to be without merit, the public employer is not obligated to arbitrate the dispute if the grievant submits it to arbitration directly. City of Pembroke Pines, Florida v. Zitnick, 26 Fla. L. Weekly D2106 (Fla. 4th DCA, August 29, 2001).

8. FLORIDA RETIREMENT SYSTEM NOT ESTOPPED WHERE EMPLOYEE MISTAKENLY ENROLLED: Rayborn was employed by Jackson Memorial Hospital as a temporary relief/pool nurse. As such, he was paid at a higher rate than full-time nurses but was ineligible for benefits. The handbook he received listed the benefits for which he was not eligible, but failed to mention retirement benefits. In addition, the hospital erroneously reported his status to the Division of Retirement as a full-time employee in a regularly-established position who participated in the Florida Retirement System. Although the error was corrected two years later, Rayborn sought inclusion in FRS, which was denied. His appeal from such denial was affirmed. In Florida, equitable estoppel consists of four elements: (1) a representation by the party estopped to the party claiming the estoppel as to a 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 detrimental change in position of the party claiming the estoppel, caused by the representation and reliance thereon. Rayborn nowhere alleged or established that he had in fact changed his position relying on any representation or that any such reliance was detrimental to him. Rayborn v. Department of Management, 26 Fla. L. Weekly D2152 (Fla. 3d DCA, September 5, 2001).

9. STATE AGENCY AGREEING TO SETTLEMENT CANNOT CONTEST IT ON APPEAL: Doyle was dismissed from employment as a special agent with the Florida Division of Alcoholic Beverages and Tobacco. She successfully appealed the termination and sought back pay, other benefits and attorneys' fees. The parties reached a settlement on all issues, but a Public Employee Relations Commission hearing officer recommended an order inconsistent with the agreed-upon terms. Ultimately, PERC rejected much of the settlement. On appeal to the District Court, the division filed a brief urging that PERC's decision be affirmed. Relying upon the law of estoppel as set forth in Item 8 above, the Court held that the agency was estopped from abandoning the settlement. The agency agreed to be bound by a certain amount of attorneys' fees and back pay. Doyle relied on those representations by relinquishing any entitlement she may have had to an attorneys' fee multiplier and advancement in rank. Florida courts look favorably upon stipulations because they shorten litigation time and lower litigation costs. Why PERC, which admitted that the stipulation was entered into with good faith after a series of concessions by both sides, would want to reject it, is beyond us. Doyle v. Department of Business Regulation, 26 Fla. L. Weekly D2183 (Fla. 1st DCA, September 6, 2001).

10. INITIAL AMOUNT OF SUPPLEMENTAL BENEFITS NOT INCLUDED IN GRICE OFFSET: Ruling en banc and receding from prior decisions, the First District Court of Appeal has held that the initial amount of supplemental benefits should not be included in calculation of a Grice offset (see C&C Newsletter for August, 2000, Item 13). The Court's unanimous (15-0) decision is based upon the apparent inconsistency in allowing the initial supplemental benefit payment to be included in the Grice offset while holding that subsequent increases in supplemental benefits should not be included. "Since supplemental benefits are designed to provide a cost-of-living adjustment to injured workers to protect the value of their benefits from effects of inflation, logic dictates that no supplemental benefit should be included in the Grice offset calculation. Otherwise, the very purpose of supplemental benefits would be frustrated." Orange County Fire Rescue v. Antonelli, 26 Fla. L. Weekly D2303 (Fla. 1st DCA, September 26, 2001).

11. EXHAUSTION OF REMEDIES NOT REQUIRED UNDER FEDERAL REHAB ACT: Appellant sought to amend his complaint to state an additional federal law claim under the Rehabilitation Act of 1973, 29 U.S.C. §794. The trial court agreed with appellee that such a claim would be futile because appellant had failed to exhaust his administrative remedies before attempting to amend his complaint. The state appellate court ruled that appellant may amend his complaint to state a claim under the Rehabilitation Act because there is no requirement to exhaust administrative remedies for claims against a non-federal employer. As authority, the court cited a Florida U.S. District Court decision and referred to cases from seven United States circuits. Incidentally, appellant already had a pending claim under the Americans With Disabilities Act. Kintz v. Escambia County Utilities Authority, 26 Fla. L. Weekly D2348 (Fla. 1st DCA, October 2, 2001).

12. "HONORABLE SERVICE" NOT PRECONDITION TO PAYMENT FOR ACCRUED ANNUAL LEAVE: Jim Nabors was employed by the Dade County Aviation Department. On the day he resigned, Nabors was arrested and charged with accepting unlawful compensation. After he pled guilty to reduced, misdemeanor charges, he requested but was denied his accrued annual and sick leave. The trial court granted the county's motion for summary judgment, finding that under common law "honorable service is a precondition to post-separation benefits," as codified by Dade County ordinance. The county leave manual provides that employees with full-time service and who retire or resign in good standing are eligible to receive payment for accrued sick leave at the time of separation. However, the leave manual contains no similar language with reference to annual leave ("Employees who have completed 13 creditable pay periods will be paid for unused annual leave at the time of separation."). The district court of appeal found no common law in Florida requiring good standing as a precondition to receiving accrued benefits. The county had adopted an ordinance that would have compelled forfeiture of annual leave, but it became effective after Nabors's benefits had already accrued. The appellate court was unpersuaded: "However greatly we might feel outrage that a government official would use public employment for criminal purposes, we cannot uphold a punishment devised after the fact." You really let us down, Gomer. Nabors v. Miami-Dade County, 26 Fla. L. Weekly D2429 (Fla. 3d DCA, October 10, 2001)

13. INVESTIGATION AGAINST LAW ENFORCEMENT OFFICER NOT CONCLUDED WHERE ALLEGATIONS "TENTATIVELY SUSTAINED": Section 112.533(2)(a), Florida Statutes, part of the Law Enforcement Officers' Bill of Rights, provides an exemption from the required disclosure of public records under Chapter 119, Florida Statutes, until an investigation of complaint filed against a law enforcement officer is complete. Here, investigation of two sheriff's office deputies resulted in a letter notifying them of a pre-disciplinary hearing on the basis that "the allegations contained in an internal investigation have been tentatively sustained." At any such hearing, the investigated officer can present his side of the case. In the circumstances, the investigation was not concluded, and the Palm Beach County Police Benevolent Association was not entitled to examine the investigative files. Not too long ago, the same parties duked it out over another internal investigation, in which the sheriff did not prevail because his pre-disciplinary letter stated "an internal investigation concerning you has been completed." (See C&C Newsletter for March, 2000, Item 7.) The sheriff obviously learned something from that case. Palm Beach County Benevolent Association v. Neumann, 26 Fla. L. Weekly D2496 (Fla. 4th DCA, October 17, 2001).

14. TESTIMONY OF PHYSICIAN WHO NEVER TREATED OR EXAMINED CLAIMANT STILL COMPETENT EVIDENCE: The Florida State Retirement Commission denied an employee in-the-line-of-duty disability benefits based, in part, on the deposition testimony of a doctor who never treated or even examined him. At the hearing, the employee did not object to introduction of the deposition, but after denial, sought reconsideration and exclusion of the deposition. The Florida Retirement System Act (Chapter 121, Florida Statutes) and the Administrative Procedure Act (Chapter 120, Florida Statutes), rather than workers' compensation law where reports of nonexamining physicians do not constitute substantial evidence, govern: Section 120.569(2)(g), Florida Statutes, allows consideration of all relevant, non-cumulative evidence of a type commonly relied upon by reasonably prudent persons in the conduct of their affairs. The subject deposition falls under this heading and would, indeed, be admissible in civil judicial proceedings. Denial of service-incurred disability benefits was affirmed because the Commission's decision does not depend on any finding of fact that is not supported by competent, substantial evidence in the record of the hearing, in accordance with Section 120.68(7)(b), Florida Statutes. Miller v. State of Florida, Division of Retirement, 26 Fla. L. Weekly D2515 (Fla. 1st DCA, October 17, 2001).

15. WHISTLE-BLOWER NOT ENTITLED TO TEMPORARY REINSTATEMENT ABSENT DISCHARGE: Following a decision of the Third District Court of Appeal (see C&C Newsletter for April, 1998, Page 2), the Fourth District Court of Appeal held that the Florida Whistle-blower's Act does not permit temporary reinstatement pending trial where claimant was not discharged in retaliation for a protected disclosure. Thus, although the Whistle-blower's Act protects against all forms of retaliation, Section 112.3187(9)(f), Florida Statutes, only permits temporary reinstatement if the employee complains of being discharged in retaliation. Unlike its sister court, this court did not invite the Florida Legislature, in its wisdom, to address the apparent deficiency. Luster v. West Palm Beach Housing Authority, 26 Fla. L. Weekly D2590 (Fla. 4th DCA, October 31, 2001).

16. FLORIDA SHERIFF'S DISCIPLINARY ACTION GOVERNED BY SPECIAL ACT: Chapter 30, Florida Statutes, entitled "Sheriffs," applies to all deputy sheriffs except for those in a county that, by special act of the Legislature, has established rights and procedures for deputy sheriffs that are equivalent to or greater than those prescribed by the Chapter. Chapter 95-514, Laws of Florida, created a Civil Service Board and codified certain procedures applicable to deputy sheriffs in the Lee County Sheriff's Department. The special act permits suspended employees to file an appeal with the board, which has the authority to investigate and restore pay if it is found that the sheriff acted in bad faith. Thus, the circuit court erred in overturning the board's upholding of a three week suspension because the sheriff did not prove just cause and otherwise failed to follow certain procedures of Section 30.076, Florida Statutes. However, because the circuit court did not apply the correct law, the matter was remanded to the circuit court to apply the correct standard of review to determine whether the board's action was proper. McDougall v. Van House, 26 Fla. L. Weekly D2585 (Fla. 2d DCA, October 31, 2001).

17. IN FLORIDA THERE IS NO COMMON LAW TORT ACTION FOR WRONGFUL TERMINATION: A terminated employee who has pursued civil service remedies is not entitled to bring an independent action to challenge propriety of the discharge. There is no action in Florida for the common law tort of wrongful termination. Bass v. Metro Dade County Department of Corrections and Rehabilitation, 26 Fla. L. Weekly D2601 (Fla. 3d DCA, October 31, 2001).

18. FLORIDA APPELLATE COURT WILL NOT RULE ON CONSTITUTIONALITY OF SCHOOL RECOGNITION PROGRAM: The Florida School Recognition Program, Section 231.905, Florida Statutes, authorizes incentive awards to be paid to certain schools either for distribution to employees as bonuses or for procurement of additional educational materials. The Pinellas Classroom Teachers' Association challenged the statute's constitutionality, claiming that because it allows incentive bonuses to be paid without resort to collective bargaining first, the statute abridges the constitutional rights of teachers to bargain collectively as to wages. In denying the PCTA's request for temporary injunction, the trial court did not reach the issue of constitutionality. Thus, although the appellate court affirmed, it also did not decide the issue of constitutionality. Pinellas Classroom Teachers' Association v. The School Board of Pinellas County, Florida, 26 Fla. L. Weekly D2658 (Fla. 2d DCA, November 7, 2001).

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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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