United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

C.H., Appellant 

and 

DEPARTMENT OF THE INTERIOR, BUREAU 

OF RECLAMATION, Grand Coulee, WA, 

Employer 

__________________________________________ 

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Docket No. 16-0968 

Issued: August 8, 2016 

Appearances: Case Submitted on the Record

Stephanie N. Leet, Esq., for the appellant1

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

ALEC J. KOROMILAS, Alternate Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On April 6, 2016 appellant, through counsel, filed a timely appeal from January 5, 2016 

merit decisions of the Office of Workers’ Compensation Programs (OWCP). Pursuant to the 

Federal Employees’ Compensation Act2 (FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the Board 

has jurisdiction over the merits of this case. 

 1

 In all cases in which a representative has been authorized in a matter before the Board, no claim for a fee for 

legal or other service performed on appeal before the Board is valid unless approved by the Board. 20 C.F.R. 

§ 501.9(e). No contract for a stipulated fee or on a contingent fee basis will be approved by the Board. Id. An 

attorney or representative’s collection of a fee without the Board’s approval may constitute a misdemeanor, subject 

to fine or imprisonment for up to one year or both. Id.; see also 18 U.S.C. § 292. Demands for payment of fees to a 

representative, prior to approval by the Board, may be reported to appropriate authorities for investigation. 

2

 5 U.S.C. § 8101 et seq. 
2

ISSUES 

The issues are: (1) whether OWCP properly rescinded the schedule award granted to 

appellant on January 16, 2014; (2) whether appellant received a $62,032.20 overpayment of 

compensation; and (3) whether OWCP abused its discretion by refusing to waive recovery of the 

overpayment. 

FACTUAL HISTORY 

On August 13, 2008 appellant, then a 56-year-old mechanic, filed a traumatic injury 

claim (Form CA-1) alleging that he sustained injury to his right knee that day when he slipped on 

a cleaner hose and twisted his right knee. On September 22, 2008 OWCP accepted that appellant 

sustained a tear of the medial meniscus of his right knee and a sprain of the medial collateral 

ligament of his right knee.3

On October 21, 2008 appellant underwent OWCP-authorized right knee surgery, 

including a partial medial meniscectomy, partial lateral meniscectomy, and medial and lateral 

femoral condyle chondroplasty. He stopped work on October 21, 2008 and returned to work on 

a full-time basis on December 8, 2008. On January 23, 2012 appellant underwent OWCPauthorized right total knee arthroplasty. He stopped work on January 23, 2012 and returned to 

work on a full-time basis on July 2, 2012. 

On August 20, 2009 appellant filed a claim for compensation (Form CA-7) requesting a 

schedule award due to his accepted work conditions.

By decision dated November 3, 2009, OWCP granted appellant a schedule award for 26 

percent permanent impairment of his right lower extremity. The award ran for 74.88 weeks from 

September 15, 2009 to February 21, 2011 and was based on an October 7, 2009 impairment 

rating by Dr. Kenneth D. Sawyer, a Board-certified internist serving as an OWCP medical 

adviser. Dr. Sawyer applied the standards of the sixth edition of the American Medical 

Association, Guides to the Evaluation of Permanent Impairment (6th ed. 2009) (A.M.A., Guides) 

to the September 15, 2009 examination findings of Dr. James W. Lamberton, an attending 

osteopath and Board-certified orthopedic surgeon.4

On November 25, 2013 appellant filed a claim for compensation (Form CA-7) requesting 

additional schedule award compensation benefits. He submitted a September 20, 2013 report in 

which Dr. Lamberton determined that he had a total right leg impairment of 21 percent under the 

standards of the sixth edition of the A.M.A., Guides. On December 12, 2013 Dr. L.J. Weaver, a 

Board-certified orthopedic surgeon serving as an OWCP medical adviser, indicated that he 

 3

 OWCP later accepted that appellant also sustained trochanteric bursitis of his right hip due to the August 13, 

2008 injury. 

4

 Dr. Sawyer calculated appellant’s right lower extremity impairment using the diagnosis-basis method and chose 

appellant’s right total knee replacement as the primary diagnosis under Table 16-3 (Knee Regional Grid). See

A.M.A., Guides 511, Table 16-3. 
3

agreed with Dr. Lamberton’s opinion that appellant had 21 percent permanent impairment of his 

right lower extremity.5

By decision dated January 16, 2014, OWCP granted appellant a schedule award for 21 

percent permanent impairment of his right lower extremity. The award ran for 60.48 weeks from 

September 20, 2013 to November 17, 2014 and was based on the impairment rating of 

Dr. Lamberton as confirmed by Dr. Weaver. 

In a letter dated February 5, 2015, OWCP advised appellant that it proposed to rescind 

the schedule award it granted him on January 16, 2014 because it was duplicative of the award 

he received on November 3, 2009. It provided him 30 days to challenge the proposed rescission 

action and indicated, “[A] review of your file shows that previously you were compensated for a 

right leg impairment at 26 percent, therefore [OWCP] proposes to rescind your schedule award 

decision dated January 16, 2014 as you were previously paid for your permanent impairment.” 

Appellant sent OWCP a letter indicating that he was obtaining additional medical 

evidence, but he did not submit such evidence within the time allotted by OWCP. 

By decision dated March 9, 2015, OWCP rescinded the January 16, 2014 schedule award 

for which appellant received $62,032.20 in schedule award compensation. It indicated: 

“[OWCP] finds that at the time of your first schedule award, the medical evidence 

properly supported the first schedule award decision dated November 3, 2009, 

awarding 26 percent for the right leg, and therefore this decision was correctly 

issued and is not being revisited. However subsequently, you were paid an 

additional 21 percent impairment for your right leg per the schedule award 

decision letter dated January 16, 2014.... Accordingly, [OWCP] finds that you 

have been overcompensated by 21 percent for your right leg (a total of 

$62,032.20) as you were previously and properly compensated for a 26 percent 

right leg impairment on November 3, 2009. Therefore [OWCP] is rescinding the 

schedule award decision dated January 16, 2014.” 

In a March 24, 2015 notice, OWCP advised appellant of its preliminary determination 

that he received a $62,032.20 overpayment of compensation because he was paid this amount for 

the January 16, 2014 schedule award which was rescinded as being issued in error.6

 It also made 

a preliminary determination that he was not at fault in the creation of the overpayment. OWCP 

advised appellant that he could submit evidence challenging the fact, amount, or finding of fault 

and request waiver of the overpayment. It informed him that he could submit additional 

evidence in writing or at prerecoupment hearing, but that a prerecoupment hearing must be 

requested within 30 days of the date of the written notice of overpayment. OWCP requested that 

 5

 Dr. Lamberton and Dr. Weaver calculated appellant’s right lower extremity impairment using the diagnosisbasis method and chose appellant’s right total knee replacement as the primary diagnosis under Table 16-3. 

6

 The record contains evidence showing that appellant received $62,032.20 in connection with the January 16, 

2014 schedule award. 
4

appellant complete and return an enclosed financial information questionnaire within 30 days 

even if he was not requesting waiver of the overpayment. 

On April 23, 2015 appellant requested a telephonic prerecoupment hearing with an 

OWCP hearing representative.7

 He submitted an April 12, 2015 report in which Dr. Lamberton 

opined that appellant had 40 percent permanent impairment of his right lower extremity under 

the sixth edition of the A.M.A., Guides. Appellant also submitted a Form OWCP-20 and 

numerous documents, including account statements and bills, documenting his monthly 

expenses, monthly income, and assets. 

During the hearing held on October 16, 2015, counsel argued that the rescission action 

was improper because Dr. Lamberton had now determined that appellant sustained a greater 

impairment than previously specified. He again argued that appellant detrimentally relied upon 

the overpayment because he spent monies on a family trip to Germany and a loan to his son and 

would not have spent these monies if he had not received the schedule award. A discussion was 

held regarding appellant’s monthly income, monthly expenses, and assets. 

In a November 13, 2015 letter, counsel advised that appellant’s son had passed away on 

August 16, 2015. Additional documentation, including records regarding income, expenses, and 

assets, was submitted. The documentation of record shows that after August 16, 2015 appellant 

was married with no dependents. 

In a January 5, 2016 decision, the OWCP hearing representative denied modification of 

OWCP’s March 9, 2015 decision rescinding the schedule award appellant received on 

January 16, 2014. The hearing representative noted that OWCP properly found that the 

January 16, 2014 schedule award was duplicative of the schedule award appellant previously 

received on November 3, 2009. The hearing representative indicated that Dr. Lamberton 

produced an April 12, 2015 report opining that appellant had 40 percent right lower extremity 

impairment, but that this report was received after OWCP’s March 9, 2015 rescission decision 

and did not show that the decision was erroneous when made. 

In another January 5, 2016 decision, OWCP’s hearing representative determined that 

appellant received a $62,032.20 overpayment of compensation and that appellant was not at fault 

in the creation of the overpayment, but that the overpayment was not subject to waiver of 

recovery. The hearing representative conducted an itemized evaluation of appellant’s claimed 

finances and identified which of the claimed figures were supported by the submitted 

documentation and which were not. The hearing representative concluded that appellant had 

$7,663.51 in monthly income, $3,851.79 in monthly expenses, and $77,976.20 in assets (from 

checking and savings bank accounts and his Thrift Savings Plan account). The hearing 

representative noted that appellant’s monthly income exceeded his monthly expenses by more 

than $50.00 and that his assets were well above the $8,000.00 threshold for a married claimant 

and that, therefore, appellant did not qualify for waiver of recovery of the overpayment on the 

basis that he would undergo hardship in repaying the overpayment. The hearing representative 

 7

 In an April 20, 2015 letter, counsel argued that appellant detrimentally relied upon the overpayment because he 

spent monies on a family trip to Germany and a loan to his son and would not have spent these monies if he had not 

received the schedule award. 
5

also noted that appellant did not show detrimental reliance because he did not substantiate that 

the overpaid amount was spent on a vacation. The hearing representative concluded that 

appellant had not established a basis for allowing waiver of recovery of the $62,032.20 

overpayment of compensation.8

 

LEGAL PRECEDENT -- ISSUE 1 

Section 8128 of FECA provides that the Secretary of Labor may review an award for or 

against payment of compensation at any time on his own motion or on application.9

 The Board 

has upheld OWCP’s authority to reopen a claim at any time on its own motion under section 

8128 of FECA and, where supported by the evidence, set aside or modify a prior decision and 

issue a new decision.10 The Board has noted, however, that the power to annul an award is not 

an arbitrary one and that an award for compensation can only be set aside in the manner provided 

by the compensation statute.11 

Workers’ compensation authorities generally recognize that compensation awards may be 

corrected, in the discretion of the compensation agency and in conformity with statutory 

provision, where there is good cause for so doing, such as mistake or fraud. It is well established 

that, once OWCP accepts a claim, it has the burden of justifying the termination or modification 

of compensation benefits. This holds true where, as here, OWCP later decides that it erroneously 

accepted a claim. In establishing that its prior acceptance was erroneous, OWCP is required to 

provide a clear explanation of the rationale for rescission.12

ANALYSIS -- ISSUE 1 

On September 22, 2008 OWCP accepted that on August 13, 2008 appellant sustained a 

tear of the medial meniscus of his right knee and a sprain of the medial collateral ligament of his 

right knee.13 By decision dated November 3, 2009, it granted him a schedule award for 26 

percent permanent impairment of his right lower extremity. The award ran for 74.88 weeks from 

September 15, 2009 to February 21, 2011 and was based on an October 7, 2009 impairment 

 8

 OWCP directed that appellant repay the overpayment by making monthly payments of $2,000.00. With respect 

to the recovery of an overpayment, the Board’s jurisdiction is limited to those cases where OWCP seeks recovery 

from continuing compensation benefits. D.R., 59 ECAB 148 (2007); Miguel A. Muniz, 54 ECAB 217 (2002). As 

appellant was not in receipt of continuing compensation at the time of OWCP’s overpayment determination, the 

Board does not have jurisdiction over the method of recovery of the overpayment in this case. See Lorenzo 

Rodriguez, 51 ECAB 295 (2000); 20 C.F.R. § 10.441. 

9

 5 U.S.C. § 8128. 

10 John W. Graves, 52 ECAB 160, 161 (2000). 

11 See 20 C.F.R. § 10.610. 

12 Supra note 10. 

13 OWCP later accepted that appellant also sustained trochanteric bursitis of his right hip due to the August 13, 

2008 incident. On October 21, 2008 appellant underwent OWCP-authorized right knee surgery, including a partial 

medial meniscectomy, partial lateral meniscectomy, and medial and lateral femoral condyle chondroplasty. On 

January 23, 2012 he underwent OWCP-authorized right total knee arthroplasty. 
6

rating by Dr. Sawyer, an OWCP medical adviser. Dr. Sawyer applied the standards of the sixth 

edition of the A.M.A., Guides and chose appellant’s right total knee replacement as the primary 

diagnosis for rating appellant’s impairment using the diagnosis-basis method. By decision dated 

January 16, 2014, OWCP granted appellant a schedule award for 21 percent permanent 

impairment of his right lower extremity. The award ran for 60.48 weeks from September 20, 

2013 to November 17, 2014 and was based on the impairment ratings of Dr. Lamberton, an 

attending physician, and Dr. Weaver, an OWCP medical adviser. Both physicians applied the 

standards of the sixth edition of the A.M.A., Guides and chose appellant’s right total knee 

replacement as the primary diagnosis for rating appellant’s impairment using the diagnosis-basis 

method. 

The Board finds that OWCP, in a decision dated March 9, 2015, properly rescinded 

appellant’s January 16, 2014 schedule award for which he received $62,032.20 in schedule 

award compensation. OWCP provided justification for this rescission action by explaining that 

the January 16, 2014 schedule award for 21 percent right leg impairment was a duplicate of the 

November 3, 2009 schedule award for 26 percent right leg impairment.14 On appeal, counsel 

argued that the rescission action was improper because appellant had submitted subsequent 

evidence showing that he had more than 26 percent right lower extremity impairment. However, 

the OWCP hearing representative properly explained that, although Dr. Lamberton produced an 

April 12, 2015 report opining that appellant had 40 percent right lower extremity impairment, 

this report was received after OWCP’s March 9, 2015 rescission decision and did not show that 

the decision was erroneous when made.15 For these reasons, OWCP properly rescinded 

appellant’s January 16, 2014 schedule award. 

Appellant may submit new evidence or argument with a written request for 

reconsideration to OWCP within one year of this merit decision, pursuant to 5 U.S.C. § 8128(a) 

and 20 C.F.R. §§ 10.605 through 10.607. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8102(a) of FECA provides that the United States shall pay compensation for the 

disability or death of an employee resulting from personal injury sustained while in the 

performance of his duty.16 Section 8129(a) of FECA provides, in pertinent part: 

“When an overpayment has been made to an individual under this subchapter 

because of an error of fact or law, adjustment shall be made under regulations 

prescribed by the Secretary of Labor by decreasing later payments to which an 

individual is entitled.”17

 14 See supra note 12. 

15 Moreover, no adjudication has been carried out showing that appellant has more than 26 percent right lower 

extremity impairment. 

16 5 U.S.C. § 8102(a). 

17 Id. at § 8129(a). 
7

Section 8116(a) of FECA provides that while an employee is receiving compensation or 

if he has been paid a lump sum in commutation of installment payments until the expiration of 

the period during which the installment payments would have continued, the employee may not 

receive salary, pay or remuneration of any type from the United States, except in limited 

specified instances.18

ANALYSIS -- ISSUE 2 

 The Board finds that appellant received a $62,032.20 overpayment of compensation. For 

the reasons described above, OWCP properly rescinded the schedule award granted to appellant 

on January 16, 2014 because it was duplicative of the schedule award granted to him on 

November 3, 2009. Therefore, appellant would not be entitled to receive schedule award 

compensation related to the January 16, 2014 schedule award. The record contains evidence 

which shows that appellant received $62,032.20 in connection with his January 16, 2014 

schedule award despite the fact that he was not entitled to receive such monies. Therefore, 

OWCP properly determined that appellant received a $62,032.20 overpayment. 

LEGAL PRECEDENT -- ISSUE 3 

The waiver or refusal to waive an overpayment of compensation by OWCP is a matter 

that rests within OWCP’s discretion pursuant to statutory guidelines.19 These statutory 

guidelines are found in section 8129(b) of FECA which states: “Adjustment or recovery [of an 

overpayment] by the United States may not be made when incorrect payment has been made to 

an individual who is without fault and when adjustment or recovery would defeat the purpose of 

this subchapter or would be against equity and good conscience.”20 If OWCP finds a claimant to 

be without fault in the matter of an overpayment, then, in accordance with section 8129(b), 

OWCP may only recover the overpayment if it determined that recovery of the overpayment 

would neither defeat the purpose of FECA nor be against equity and good conscience. 

According to 20 C.F.R. § 10.436, recovery of an overpayment would defeat the purpose 

of FECA if recovery would cause hardship because the beneficiary needs substantially all of his 

income (including compensation benefits) to meet current ordinary and necessary living 

expenses, and also, if the beneficiary’s assets do not exceed a specified amount as determined by 

OWCP from data provided by the Bureau of Labor Statistics.21 According to 20 C.F.R. 

§ 10.437, recovery of an overpayment is considered to be against equity and good conscience 

 18 Id. at § 8116(a). 

19 See Robert Atchison, 41 ECAB 83, 87 (1989). 

20 5 U.S.C. § 8129(b). 

21 20 C.F.R. § 10.436. An individual is deemed to need substantially all of his or her monthly income to meet 

current and ordinary living expenses if monthly income does not exceed monthly expenses by more than $50.00. 

Assets must not exceed a resource base of $4,800.00 for an individual or $8,000.00 for an individual with a spouse 

or dependent plus $960.00 for each additional dependent. See Federal (FECA) Procedure Manual, Part 6 -- Debt 

Management, Initial Overpayment Actions, Chapter 6.200.6(a) (October 2004); B.F., Docket No. 13-785 (issued 

September 20, 2013). 
8

when an individual who received an overpayment would experience severe financial hardship 

attempting to repay the debt and when an individual, in reliance on such payments or on notice 

that such payments would be made, gives up a valuable right or changes his position for the 

worse.

22 To establish that a valuable right has been relinquished, it must be shown that the right 

was in fact valuable, that it cannot be regained and that the action was based chiefly or solely in 

reliance on the payments or on the notice of payment.23

ANALYSIS -- ISSUE 3 

 Appellant has not established that recovery of the overpayment would defeat the purpose 

of FECA because he has not shown both that he needs substantially all of his current income to 

meet ordinary and necessary living expenses and that his assets do not exceed the allowable 

resource base.24 The record reflects that appellant has assets of $77,976.20 from checking and 

savings bank accounts and his Thrift Savings Plan account.25 Therefore, appellant has not shown 

that his assets do not exceed the resource base relevant for his circumstance, i.e., $8,000.00 for 

an individual with a spouse.26 Because appellant has not met the second prong of the two-prong 

test of whether recovery of the overpayment would defeat the purpose of FECA, it is not 

necessary for OWCP to consider the first prong of the test, i.e., whether appellant needs 

substantially all of his current income to meet ordinary and necessary living expenses.27

 Appellant has not established that recovery of the overpayment would be against equity 

and good conscience as he has not shown, for the reasons noted above, that he would experience 

severe financial hardship in attempting to repay the debt or that he relinquished a valuable right 

or changed his position for the worse in reliance on the payment which created the 

overpayment.28 On appeal, counsel argued that appellant detrimentally relied upon the 

overpayment because he spent monies on a family trip to Germany and a loan to his son and 

would not have spent these monies if he had not received the schedule award. The hearing 

representative properly found that appellant did not show detrimental reliance because he did not 

substantiate that the overpaid amount was spent on a vacation and that, even if the loan to 

appellant’s son were substantiated, the granting of such an intra-family loan would not qualify as 

detrimental reliance under OWCP procedure.29

 22 20 C.F.R. § 10.437(a), (b). 

23 Id. at § 10.437(b)(1). 

24 The Board notes that OWCP determined that appellant was not at fault in the creation of the overpayment. 

25 The Board has held that that a claimant’s contributions to a Thrift Savings Plan and earnings from these 

contributions are assets which OWCP may consider in determining waiver. C.W., Docket No. 11-1338 (issued 

December 19, 2011). 

26 See supra note 21. 

27 Id. 

28 See William J. Murphy, 41 ECAB 569, 571-72 (1989). 

29 Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 

6.200.6.b(3), Example 6 (June 2009). 
9

 Because appellant has failed to establish that recovery of the overpayment would defeat 

the purpose of FECA or be against equity and good conscience, he has failed to show that 

OWCP abused its discretion by refusing to waive the overpayment. 

CONCLUSION 

The Board finds that OWCP properly rescinded the schedule award granted to appellant 

on January 16, 2014. The Board further finds that appellant received a $62.032.20 overpayment 

of compensation and that OWCP did not abuse its discretion by refusing to waive recovery of the 

overpayment. 

ORDER 

IT IS HEREBY ORDERED THAT the January 5, 2016 decisions of the Office of 

Workers’ Compensation Programs are affirmed. 

Issued: August 8, 2016 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees’ Compensation Appeals Board