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Blake v. St. Johns River Power Park System Employees' Retirement Plan

Florida Court of Appeals, First District

July 9, 2019

Randall Blake, James Bradford, Robert Bunn, Mark Carroll, Donald Cheatham, Kyle E. Doran, Roger Emery, Robert Gher, Larry Gochnour, Mark S. Gray, Larry Green, James Jackson, George Jarnutowski, Lyndon Johnson, Kevin Scott Lagow, Roy Lawrence, Thomas Gary Lee, Robert Lemay, Mason Logan, Clyde Lowe, James T. McDaniel, Penny McGuire, Barry Form Morgan, Alyson Cobb Morgan, Charles Newton, Francis Robert Neyer, Bruce Nicewander, Beverly Oakes, William Alan Page, Sharon Patterson, Robert Recker, Joe Rouse, Lloyd Sanders, Marvin Tom Scarborough, Paul Smith, Robert Spittler, Jerry Stapleton, Carol Stevens, Art Wallace, Winston Wayne Walters, Barbara Whitaker, and Mark Wright, Petitioners,
v.
St. Johns River Power Park System Employees' Retirement Plan, Respondent.

         Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

          Petition for Writ of Certiorari-Original Jurisdiction.

          Thomas A. "Tad" Delegal, III, and James C. Poindexter of Delegal Law Offices, P.A., Jacksonville, for Petitioners

          Cindy A. Laquidara and Allison M. Stocker of Akerman LLP, Jacksonville, for Respondent.

          PER CURIAM.

         Petitioners seek review of an order of the circuit court, which while sitting as an appellate court exercising certiorari review, denied Petitioners relief from a local administrative action impacting their retirement benefits. Constrained by the narrow standard of review applicable to second-tier certiorari, we deny the petition.

         Facts and Procedural History

         Petitioners are retirees who were employed by the St. Johns River Power Park and are members of the St. Johns River Power Park Employees' Retirement Plan ("Respondent" or the "Plan"). Petitioners retired on various dates over a thirteen-year period beginning in 2003 and began receiving pension benefits from Respondent. In 2015, during a required Internal Revenue Service ("IRS") review of the Plan, Respondent determined that its actuaries had miscalculated some retirees' benefits on an ongoing basis for thirteen years. Respondent concluded that the miscalculation resulted in Petitioners' being paid more benefits than they were entitled to under the Plan. Upon discovering the error, Respondent provided a submission ("Corrective Action") to the IRS Voluntary Correction Program indicating that it planned to take corrective action by recouping the overpayments, including five percent interest, and adjusting Petitioners' future benefits accordingly. Through its application to the IRS, Respondent requested that the IRS issue a compliance statement approving its proposed Corrective Action. The IRS approved the Corrective Action and issued a signed compliance statement. Respondent then sent letters to Petitioners notifying them of its error and outlining their options for repaying the overpayment.

         Petitioners requested and received a hearing before the committee charged with managing and administering the Plan (the "Committee") to contest the Corrective Action. Petitioners argued that Respondent was barred from taking the Corrective Action under the doctrine of equitable estoppel. Through sworn affidavits, Petitioners contended that they relied on Respondent's representations in deciding to retire on the dates elected, rather than later dates when they would have received higher benefits. Counsel representing the Committee's initial decision to recoup the overpayments argued that Petitioners were not entitled to the money and that the IRS requires recoupment in such circumstances for the Plan to keep its tax-qualified status.

         The Committee issued its final decision denying Petitioners' appeal and requiring repayment of the overpayments, plus interest. In rendering its unanimous decision, the Committee's order stated that it considered the "affidavits and retirement files on the part of [Petitioners] and written and oral legal submissions and argument with regard to [their] position." The Committee provided the following reasons for the denial of Petitioner's appeal:

1. [Petitioners] have been overpaid and have received benefits not authorized or contemplated by the Plan. Accordingly, they must return those benefits. There is neither a hardship exception, nor, the Committee determined, evidence of such a hardship even if there were such an exception for any of the Members . . . .
2. Plan section 10.15 provides that any overpayment due to the Plan's trust fund shall be subject to five (5%) interest.
3. Plan section 7.06(2) requires all actions of the Committee to be uniform and nondiscriminatory, and other Plan participants have been assessed the interest charge.
4. A failure to follow the governing Plan document's terms would not comply with federal tax requirements and therefore would jeopardize the tax-qualified status of the Plan, with adverse tax consequences to ...

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