Settlement Fund recovery of $11.6K from deceased retiree opposed

An administrator of the estate of a now-deceased retiree is opposing the NMI Settlement Fund’s claim to recover from the estate $11,561 in retirement benefits that it claims was an overpayment.

John Albert Benavente, the son and administrator of the estate of his deceased father, Fernando Cepeda Benavente, asked the Superior Court to rule that the Settlement Fund’s claim is barred by the statute of limitations, doctrine of laches, or by equitable estoppel.

John Albert Benavente, through counsel Robert T. Torres, said the estate should not be held responsible for mistakes committed by the NMI Settlement Fund, which is the former NMI Retirement Fund.

The Settlement Fund, through counsel Nicole M. Torres-Ripple, asked the court to issue an order finding that because John Benavente failed to notify the Settlement Fund of the 60-day filing deadline, the claim against the estate is timely filed. Torres-Ripple asked the court to issue a finding that the estate improperly rejected the Settlement Fund’s claim, and order the estate to pay the Settlement Fund the entire claim of $11,561.

The deceased retiree, Fernando Benavente, was an employee of the Fire Department until his retirement in 1991.

In John Benavente’s opposition, Torres said the Settlement Fund’s claim is riddled with mistake after mistake committed by both the NMI Retirement Fund and NMI Settlement Fund. Torres said the Retirement Fund is responsible for its errors and the Settlement Fund continued and ratified the Retirement Fund’s errors by continuing payments.

Torres said Fernando Benavente, and now his surviving spouse, Lorna A. Benavente, have been unfairly prejudiced by the Retirement Fund’s and Settlement Fund’s miscalculations.

“It is manifestly unjust for the NMI Settlement Fund, after such an unreasonably long delay, to demand that the estate now pay for the mistakes of the NMI Retirement Fund and NMI Settlement Fund,” he said.

After Fernando Benavente’s retirement in 1991, the Retirement Fund reviewed, determined, and awarded him pension for his government service in the gross amount of $907 every 15th and last day of the month, Torres said. On May 7, 2012, the Retirement Fund informed Fernando Benavente that an audit by the internal auditors of the Retirement Fund has revealed the Retirement Fund has incorrectly computed his retirement benefits by giving service credit instead of vetting on Fernando Benavente’s accumulated overtime and compensatory hours. That improper calculation allegedly resulted in an overpayment to Fernando Benavente in the amount of $23,433 as of April 30, 2012. The Retirement Fund concluded that Fernando Benavente’s annual pension should have been $21,778, instead of the $22,809 the Retirement Fund had computed from the date of his retirement. Based on this, the Retirement Fund concluded that it is required to adjust all future payments to Fernando Benavente and that it will deduct the overpayment from Fernando Benavente’s semi-monthly pension beginning June 5, 2012, until the overpayment is fully paid.

On June 21, 2012, the Retirement Fund sent Fernando Benavente a notice of temporary stay of adjustment of benefits, informing him that many retirees affected by the same audit had appealed the adverse actions and requested a stay. This necessitated the hiring of a special hearing officer from off-island. Although the Retirement Fund recognized that Fernando Benavente had not filed to appeal the adverse action, the Retirement Fund decided to hold off on making any adjustments to his semi-monthly payments until a special hearing officer could hear the issue.

The Settlement Fund then decided that the stay would remain in effect until Fernando Benavente had been given the opportunity to appeal the decision, at which time the Settlement Fund indicated it would provide an updated outstanding amount and notice of hearing date, time, and location.

Fernando Benavente died on Sept. 2, 2015. In 2016, John Benavente petitioned the court to appoint him as administrator of his father’s estate. The court granted the request.

Soon after that, the Settlement Fund sent a letter to Lorna A. Benavente, advising her that her application for survivor’s annuity had been approved for benefits as a surviving spouse, with the notice that it reserves the right to correct the annuity if it later discovered an error.

Torres said the Settlement Fund had issued a stay and a notice to Fernando Benavente that his payments would not be reduced regardless of the 2012 adverse decision.

In 2018, the Settlement Fund filed a claim in the estate proceedings, claiming an overpayment of benefits to Fernando Benavente in the amount of $11,561. Torres said the Settlement Funds admits that, as of May 7, 2012, the Retirement Fund was aware of the overpayments. Now, Torres said, the Settlement Fund comes back to seek overpayment, despite its inaction from 2012 to 2018, and continued payments to, first, Fernando Benavente, and then to his widow, Lorna Benavente.

The Settlement Fund issued an adverse decision letter to Lorna Benavente on Sept. 6, 2018, informing her that the Settlement Fund had audited Fernando Benavente’s file and had discovered an overpayment of benefits to her in the amount of $2,279 (from Sept. 1, 2015, through Aug. 31, 2018) and sought to recover that amount from Lorna A. Benavente. She appealed that decision on Oct. 5, 2018. The Settlement Fund has yet to take any action on her appeal.

Fernando Benavente received benefits from Dec. 1991, to the date of his death on Sept. 2, 2015. Lorna Benavente as the surviving spouse continued to receive his benefits. Yet the Retirement Fund and the Settlement Fund slept on their rights since May 2012, before they realized their error, Torres said. Now Fernando Benavente’s estate faces a demand of $11,561 and Lorna Benavente is expected to pay back $2,279 in survivor’s benefits. Torres said if the Retirement Fund had correctly computed Fernando Benavente’s benefits, there would not have been an overpayment.

In the Settlement Fund’s opening brief, Torres-Ripple said their claim against the estate is not time-barred because the administrator failed to satisfy the requirements under the NMI Probate Law and the NMI Rules of Probate Procedures and since the administrator failed to notify the Settlement Fund of the 60-day deadline, the Settlement Funds’ claim against the estate is not time-barred.