United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

P.B., Appellant

and

U.S. POSTAL SERVICE, CROSSROADS 

STATION, St. Petersburg, FL, Employer

__________________________________________

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Docket No. 17-1046

Issued: January 2, 2018

Appearances: Case Submitted on the Record

Capp Taylor, Esq., for the appellant1

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

CHRISTOPHER J. GODFREY, Chief Judge

PATRICIA H. FITZGERALD, Deputy Chief Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On April 12, 2017 appellant, through counsel, filed a timely appeal from a February 6, 

2017 merit decision 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.

ISSUES

The issues are: (1) whether appellant established more than six percent permanent 

impairment of his left upper extremity, for which he previously received a schedule award; 

 

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

(2) whether appellant received an overpayment of compensation in the amount $11,142.23; and 

(3) whether OWCP properly found him at fault and thus not entitled to waiver of recovery of the 

overpayment.

On appeal counsel asserts that appellant did not receive an October 30, 2006 letter with 

an OWCP Form CA-1044 attached in which OWCP explained the consequences of receipt of a

third-party surplus. He maintains that appellant should not be held at fault and requests waiver

of recovery of the overpayment. 

FACTUAL HISTORY

On December 18, 2004 appellant, then a 55-year-old letter carrier, filed a traumatic injury 

claim (Form CA-1) alleging that he was injured that day when he was bit by a dog while 

delivering mail and fell backward. He stopped work that day. On February 16, 2005 the 

employing establishment noted that a third-party claim had been filed. OWCP accepted left 

lower leg dog bite and cervical, left shoulder, and lumbar strains. Appellant returned to modified 

duty on March 29, 2005.

On July 20, 2005 Dr. Michael J. Smith, an attending Board-certified orthopedic surgeon, 

performed an authorized left shoulder arthroscopic rotator cuff repair. Following surgery, 

appellant returned to modified duty on August 2, 2005. He received wage-loss compensation

and medical benefits following his return to work. Dr. Smith provided his follow-up care. 

Based on Dr. Smith’s February 22, 2006 report, appellant returned to full duty on 

February 22, 2006.

By letter dated September 28, 2006, the employing establishment forwarded to OWCP a 

check it had received in the amount of $19,440.57, which represented a third-party recovery in 

this case. It noted that a surplus of $11,142.23 existed and attached a Long Form Statement of 

Recovery (Form EN1108) documenting the third-party recovery.3 The Form EN1108 reported a 

gross recovery of $101,000.00. After deducting loss of consortium ($25,000.00), attorney’s fees 

($25,333.08), court costs ($288.24), and an additional 20 percent ($10,075.74), the balance 

remaining was $40,302.94. After deducting OWCP disbursements of $29,160.71 and additional 

attorney’s fees of $9,720.14, a refund of $19,440.57 was created, and this was forwarded to 

OWCP. A surplus of $11,142.23 was created by deducting disbursements paid ($29,160.71) 

from the remaining balance ($40,302.94).

On October 10, 2006 appellant filed a claim for a schedule award (Form CA-7).

In correspondence dated October 30, 2006, OWCP informed appellant of the third-party 

surplus calculations. It indicated that any additional compensation due in his case would be 

credited against the remaining surplus upon submission of appropriate claim forms, and that 

additional medical expenses would be credited upon presentation of itemized receipted bills 

related to treatment for the accepted condition. An OWCP Form CA-1044 was attached. This 

clearly explained that funds in the remainder, which appellant would keep, were to be applied to 

 

3 A copy of the check, issued by appellant’s third-party attorney, is found in the record. 
3

future payments of compensation or to medical expenses due to the same injury. The letter was 

mailed to appellant’s address of record in Parrish, Florida.

In a November 8, 2006 report, Dr. Smith noted that appellant still had pain and loss of 

left shoulder motion. Left shoulder examination demonstrated no swelling, spasm, masses, or 

tenderness with normal stability and normal muscle strength. Sensation to light touch was

normal. Left shoulder range of motion was diminished with internal rotation to 30 degrees, 

external rotation to 60 degrees, forward elevation to 150 degrees, backward elevation to 50 

degrees, abduction to 170 degrees, and adduction to 70 degrees, which yielded six percent 

permanent impairment of the left arm. Dr. Smith advised that maximum medical improvement

(MMI) was reached on February 22, 2006 and that appellant was entitled to an additional four

percent permanent impairment due to left shoulder weakness, atrophy, pain, and loss of 

sensation. 

Dr. H.P. Hogshead, a Board-certified orthopedic surgeon and OWCP medical adviser, 

reviewed Dr. Smith’s report. He advised that Dr. Smith did not properly apply the fifth edition 

of the American Medical Association, Guides to the Evaluation of Permanent Impairment 

(hereinafter A.M.A., Guides)

4 which indicated that weakness and pain could not be used in the 

presence of decreased range of motion. Dr. Hogshead found that, under Figure 16-40, Figure 16-

43, and Figure 16-46, appellant had six percent permanent left upper extremity impairment due 

to loss of left shoulder motion, with February 22, 2006 the date of MMI.

OWCP forwarded a copy of OWCP’s medical adviser’s report to Dr. Smith and asked for 

his comments. Dr. Smith was instructed to include reference to the fifth edition of the A.M.A., 

Guides if he disagreed with the rating of Dr. Hogshead. He merely replied “don’t agree.”

By decision dated February 8, 2007, appellant was granted a schedule award for six

percent permanent impairment of the left shoulder, for a total of 18.72 weeks, to run from 

February 23 through July 4, 2006. He received a lump-sum payment of $12,418.09. 

On June 11, 2010 appellant notified OWCP that he had moved from Parrish, Florida, to 

St. Petersburg, Florida. 

On November 16, 2016 appellant called OWCP requesting that his claim be reopened to 

obtain medical treatment. OWCP indicated that, upon review of the record, it was noted that 

appellant had a third-party surplus of $11,142.23, and there was no indication in the case file that 

this amount had been absorbed by either medical expense or compensation and that he had 

received a schedule award that was not applied to the third-party surplus.

In a letter dated November 17, 2016, OWCP again notified appellant that his claim could 

not be reopened for medical treatment because the case had a third-party surplus of $11,142.33. 

It noted that on October 30, 2006 he had been informed that future compensation or medical 

expenses, due to the same injury, would be credited to the surplus, but that the record contained 

no documentation to show that he had paid for any medical expense casually related to the 

December 18, 2004 employment injury after October 30, 2006. OWCP further informed him 

 

4 A.M.A., Guides (5th ed. 2001).
4

that the third-party surplus of $11,142.23 had not been deducted from the February 8, 2007 

schedule award. An overpayment worksheet noted that appellant’s third-party surplus of 

$11,142.23 had not been applied to his schedule award of $12,418.09, which yielded an 

overpayment of compensation in the amount of $11,142.23. 

On December 13, 2016 OWCP issued a preliminary determination that appellant received 

an $11,142.23 overpayment of compensation. It explained that the overpayment was created 

because appellant was paid a schedule award in the amount of $12,418.09 when it should have 

been offset by a third-party surplus in the amount of $11,142.23. OWCP found him at fault 

because he knowingly accepted compensation to which he knew or should have known he was 

not entitled to receive. Appellant was provided an overpayment action request and an 

overpayment recovery questionnaire (Form OWCP-20) and was asked to attach supporting 

documentation including copies of income tax returns, bank account statements, bills, cancelled 

checks, pay slips, and any other records which supported the income and expenses listed. He

was informed of the actions he could take and was afforded 30 days to respond. 

Appellant requested a telephone conference, noting that he disagreed that an overpayment 

occurred or that he was at fault. He maintained that he did not receive OWCP’s October 30, 

2006 letter. In an attached overpayment questionnaire, appellant noted family monthly income 

of $10,568.81, monthly expenses of $8,794.26, and assets totaling $483,028.60 plus unimproved 

land valued at $82,000.00.5In an attached statement, he maintained that he was without fault, 

reiterating that he did not receive the October 2006 letter regarding the third-party surplus. 

Appellant noted that he had additional OWCP cases and kept excellent records. He claimed 

medical expenses for a new king bed mattress set, two pieces of exercise equipment, pillows, ice 

packs, a transcutaneous electrical nerve stimulator unit, massage therapy, chiropractic services, 

and medications, plus yard care and lawn pest control services for an approximate total of 

$23,377.36. Appellant forwarded copies of invoices for chiropractor services in 2015, a list of 

massage treatment visits from 2006 to 2016, and copies of bank statements and loan 

information.6

A telephone conference was held on February 2, 2017. Appellant again maintained that

he did not receive the October 30, 2006 letter and was therefore unaware of the third-party 

surplus. The claims examiner informed appellant that he should submit receipts of all bills 

regarding treatment for the December 18, 2004 injury, some of which would require a 

physician’s explanation regarding how these were necessary for treatment of the employment 

injury. Appellant indicated that he had no receipts for the purchases claimed. The claims 

examiner explained that yard maintenance was not compensable. Appellant submitted nothing 

further.

 

5 Appellant noted that both he and his wife received periodic FECA compensation and Social Security 

Administration (SSA) compensation, and that he also received Veterans Affairs (VA) disability and United States 

Air Force retirement compensation. He also listed an additional OWCP debt of $26,025.56, indicating that it was 

pending review. 

6 On January 24, 2017 appellant authorized Capp P. Taylor, Esq., to represent him.
5

By decision dated February 6, 2017, OWCP finalized the preliminary determination that 

appellant was at fault in the creation of an overpayment of compensation in the amount of 

$11,142.23. It found him at fault because he accepted a schedule award payment when a thirdparty surplus was outstanding. OWCP requested that appellant repay the overpayment at the rate 

of $150.00 per month or contact it within 30 days regarding repayment. 

LEGAL PRECEDENT -- ISSUE 1

It is the claimant’s burden of proof to establish permanent impairment of a scheduled 

member or function as a result of any employment injury.7 

The schedule award provisions of FECA8and its implementing federal regulations9set 

forth the number of weeks of compensation payable to employees sustaining permanent 

impairment from loss, or loss of use, of scheduled members or functions of the body. However, 

FECA does not specify the manner in which the percentage of loss shall be determined. For 

consistent results and to ensure equal justice under the law for all claimants, OWCP has adopted 

the A.M.A., Guides as the uniform standard applicable to all claimants.10 For decisions issued 

between February 1, 2001 and May 1, 2009, the fifth edition of the A.M.A., Guides was used to 

calculate schedule awards.11

ANALYSIS -- ISSUE 1

The Board finds that appellant has not established greater than six percent permanent 

impairment of his left upper extremity for which he previously received a schedule award. 

The medical evidence of record relevant to left upper extremity impairment includes

Dr. Smith’s November 8, 2006 report, in which he advised that appellant still had pain and loss 

of left shoulder motion. Left shoulder examination demonstrated no swelling, spasm, masses, or 

tenderness with normal stability and normal muscle strength. Sensation to light touch was 

normal. Dr. Smith advised that MMI had been reached on February 22, 2006. He described left 

shoulder range of motion measurements with internal rotation to 30 degrees, external rotation to 

60 degrees, forward elevation to 150 degrees, backward elevation to 50 degrees, abduction to 

170 degrees, and adduction to 70 degrees. Dr. Smith indicated that appellant’s loss of shoulder 

motion yielded six percent permanent impairment of the left arm. He also indicated that 

appellant was entitled to an additional four percent impairment due to left shoulder weakness, 

atrophy, pain, or loss of sensation. Dr. Smith, however, did not reference the A.M.A., Guides in 

 

7 See Tammy L. Meehan, 53 ECAB 229 (2001).

8 5 U.S.C. § 8107.

9 20 C.F.R. § 10.404.

10 Id. at § 10.404(a).

11 Federal (FECA) Procedure Manual, Part 3 -- Medical, Schedule Awards, Chapter 3.700, Exhibit 4 (June 2003); 

Federal (FECA) Procedure Manual, Part 3 -- Medical, Schedule Awards, Chapter 3.700, Exhibit 1 (January 2010).
6

his report. Moreover, his examination demonstrated normal muscle strength and sensation to 

light touch. 

On November 22, 2006 Dr. Hogshead, OWCP’s medical adviser, reviewed Dr. Smith’s

report and applied his range of motion findings to appropriate figures found in the fifth edition of 

the A.M.A., Guides, the edition in effect at the time of the February 8, 2007 schedule award.

12

 

He advised that Dr. Smith had not properly applied the fifth edition which indicated that 

weakness and pain could not be used in the presence of decreased range of motion.13 

Dr. Hogshead found that, in accordance with Figure 16-40, Figure 16-43, and Figure 16-46,14

appellant had six percent left upper extremity impairment due to loss of left shoulder motion, 

with February 22, 2006 the date of MMI. Even though OWCP asked Dr. Smith to comment on 

the medical adviser’s report, with reference to the A.M.A., Guides if he disagreed with

Dr. Hogshead, Dr. Smith merely replied “don’t agree.”

The Board has long held that an estimate of permanent impairment is irrelevant and of 

diminished probative value where it is not based on the A.M.A., Guides.

15

 An attending 

physician’s report, such as that of Dr. Smith, is of little probative value where the A.M.A., 

Guides are not properly followed.16 When the examining physician does not provide an estimate 

of impairment confirming to the A.M.A., Guides, OWCP may rely on the impairment rating 

provided by its medical adviser.17 Thus, there is no evidence of record to show that the 

February 8, 2007 schedule award was incorrect.

Appellant may request a schedule award or increased schedule award at any time based 

on evidence of a new exposure or medical evidence showing progression of an employmentrelated condition resulting in permanent impairment or increased impairment.

LEGAL PRECEDENT -- ISSUE 2

FECA provides that where an injury or death for which compensation is payable is 

caused under circumstances creating a legal liability in a person other than the United States to 

pay damages and a beneficiary entitled to compensation from the United States for that injury or 

death receives money or other property in satisfaction of that liability as a result of suit or 

settlement by him or in his behalf, the beneficiary, after deducting therefrom the costs of suit and 

a reasonable attorney’s fee, shall refund to the United States the amount of compensation paid by 

 

12 Id.

13 Supra note 4 at 508.

14 Id. at 476, 477, 479.

15 James R. Hill, 57 ECAB 583 (2006).

16 Richard A. Neidert, 57 ECAB 474 (2006).

17 J.Q., 59 ECAB 366 (2008).
7

the United States and credit any surplus on future payments of compensation payable to him for 

the same injury.18

The applicable regulations reiterate that after the refund owed to the United States is 

calculated, the FECA beneficiary retains any surplus remaining and this amount is credited, 

dollar for dollar, against future compensation for the same injury.19 OWCP will resume the 

payment of compensation only after the FECA beneficiary has been awarded compensation 

which exceeds the amount of the surplus.20

OWCP procedures further explain that where a beneficiary has received a third-party 

recovery resulting in a surplus, compensation payments are calculated and continue to be 

charged against the surplus, as are medical expenses that have been paid by the claimant and 

submitted for reimbursement.21 Where a beneficiary, who has received a third-party recovery,

has made the required refund, but subsequent events result in payment of compensation benefits, 

including medical benefits, for a period of time during which a third-party surplus was in the 

process of being absorbed from continuing compensation entitlement, this results in an 

overpayment of compensation.22 Such an overpayment of compensation should be adjudicated 

and processed by OWCP according to the usual overpayment procedures.23

ANALYSIS -- ISSUE 2

The record reflects that appellant received a third-party recovery of $101,000.00. After 

appropriate deductions for the costs of the suit and attorney fees, a surplus against future 

compensation of $11,142.23 was determined. As noted, future compensation payments are 

charged against the surplus until it has been exhausted.24

On February 8, 2007 appellant was granted a schedule award for six percent permanent 

impairment of the left shoulder, to run from February 23 through July 4, 2006. He received a 

lump-sum payment of $12,418.09. At the time, appellant had a third-party surplus in the amount

of $11,142.23 for the December 18, 2004 employment injury. As this was not deducted from the 

schedule award as required under section 8132 of FECA, the Board finds that an overpayment of 

compensation in the amount of $11,142.23 was created.25

 

18 5 U.S.C. § 8132; see P.C., 59 ECAB 587 (2008).

19 20 C.F.R. § 10.712.

20 Id.

21 Federal (FECA) Procedure Manual, Part 2 -- Claims, FECA Third-Party Subrogation Guidelines, Chapter 

2.11.10b(3) (March 2006).

22 Id. at Chapter 2.1100.10b(2).

23 Id.

24 20 C.F.R. § 10.712.

25 See B.G., Docket No. 14-850 (issued September 17, 2014).
8

LEGAL PRECEDENT -- ISSUE 3

Section 8129 of FECA provides that an overpayment in compensation shall be recovered 

by OWCP unless “incorrect payment has been made to an individual who is without fault and 

when adjustment or recovery would defeat the purpose of FECA or would be against equity and 

good conscience.”

26

Section 10.433(a) of OWCP regulations provides that OWCP:

“[M]ay consider waiving an overpayment only if the individual to whom it was 

made was not at fault in accepting or creating the overpayment. Each recipient of 

compensation benefits is responsible for taking all reasonable measures to ensure 

that payments he or she receives from OWCP are proper. The recipient must 

show good faith and exercise a high degree of care in reporting events which may 

affect entitlement to or the amount of benefits.... A recipient who has done any of 

the following will be found to be at fault in creating an overpayment: 

(1) Made an incorrect statement as to a material fact which he or she knew 

or should have known to be incorrect; or 

(2) Failed to provide information which he or she knew or should have 

known to be material; or 

(3) Accepted a payment which he or she knew or should have known to be 

incorrect. (This provision applies only to the overpaid individual).”

27

To determine if an individual was at fault with respect to the creation of an overpayment, 

OWCP examines the circumstances surrounding the overpayment. The degree of care expected 

may vary with the complexity of those circumstances and the individual’s capacity to realize that 

he or she is being overpaid.28

Even if an overpayment resulted from negligence by OWCP, this does not excuse the 

employee from accepting payment, which the employee knew or should have been expected to 

know she was not entitled.29

ANALYSIS -- ISSUE 3

OWCP found appellant at fault because he accepted a schedule award payment he knew 

or should have known he was not entitled to receive. In its October 30, 2006 letter, it informed 

him of his rights and responsibilities regarding the third-party recovery surplus in the instant 

 

26 5 U.S.C. § 8129.

27 20 C.F.R. § 10.433(a); see Sinclair L. Taylor, 52 ECAB 227 (2001); see also 20 C.F.R. § 10.430.

28 Id. at 10.433(b); Neill D. Dewald, 57 ECAB 451 (2006).

29 Diana L. Booth, 52 ECAB 370 (2001).
9

claim. Although appellant maintains that he did not receive this letter, it is presumed, in the 

absence of evidence to the contrary, that a notice mailed to an individual in the ordinary course 

of business was received by that individual. This presumption arises when it appears from the 

record that the notice was properly addressed and duly mailed.30 The mailbox rule provides that 

proper and timely mailing of a document raises a rebuttable presumption of receipt by the 

addressee. The Board has applied the mailbox rule to claimants under FECA and to OWCP 

when it is established that the mailing was in the ordinary course of the sender’s business 

practices. It serves as a tool for determining in the face of inconclusive evidence, whether or not 

receipt has actually been accomplished. The mailbox rule is to facilitate the fact finder in 

determining whether receipt of a document has occurred. However, as a rebuttable presumption, 

receipt will not be assumed when there is evidence of nondelivery.31 In the present case, 

OWCP’s October 30, 2006 letter was mailed to appellant’s address of record in Parrish, Florida, 

and there is no evidence of record that the mailing was undeliverable. As such, the Board finds 

that the October 30, 2006 correspondence was received by appellant.32

Although OWCP may have erred in not applying the third-party surplus when issuing the 

schedule award payments, this does not relieve appellant from his obligation to repay the 

overpayment. Fault can be established if the circumstances show that the claimant accepted a 

payment he or she should have known was incorrect.33 As discussed above, in the October 30, 

2006 letter, OWCP provided a specific explanation regarding the nature of the surplus and 

appellant’s entitlement to compensation. Based on this evidence, appellant should have known 

that the February 8, 2007 schedule award payment was incorrect.34 Thus, OWCP properly found 

appellant at fault in creating the overpayment.35

CONCLUSION

The Board finds that appellant has not established more than six percent permanent 

impairment of his left upper extremity for which he previously received a schedule award. The 

Board also finds that OWCP properly determined that appellant received of an overpayment of 

compensation in the amount of $11,142.23, for which he was at fault, and thus not entitled to 

waiver of recovery of the overpayment.

 

30 Cresenciano Martinez, 51 ECAB 322 (2000).

31 M.U., Docket No. 09-526 (issued September 14, 2009).

32 C.B., Docket No. 16-1562 (issued December 22, 2016).

33 See B.G., supra note 25.

34 Id.

35 The Board does not have jurisdiction over recovery of the overpayment as OWCP has not issued a final 

decision directing recovery from continuing compensation benefits. See 20 C.F.R. § 501.2(c); see D.R., 59 ECAB 

148 (2007); V.D., Docket No. 13-1101 (issued September 8, 2014).
10

ORDER

IT IS HEREBY ORDERED THAT the February 6, 2017 decision of the Office of 

Workers’ Compensation Programs is affirmed.

Issued: January 2, 2018

Washington, DC

Christopher J. Godfrey, Chief Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board