United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

L.G., Appellant

and

U.S. POSTAL SERVICE, TWIN LAKES POST 

OFFICE, Twin Lakes, WI, Employer

__________________________________________

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Docket No. 21-0950

Issued: June 6, 2022

Appearances: Case Submitted on the Record

Alan J. Shapiro, Esq., for the appellant1

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

PATRICIA H. FITZGERALD, Deputy Chief Judge

JANICE B. ASKIN, Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On June 1, 2021 appellant, through counsel, filed a timely appeal from an April 14, 2021 

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.3 

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.

3 The Board notes that,following the April14, 2021 decision, OWCP received additional evidence. However, the 

Board’s Rules of Procedure provides: “The Board’s review of a case is limited to the evidence in the case record that 

was before OWCP at the time of its final decision. Evidence not before OWCP will not be considered by the Board 

for the first time on appeal.” 20 C.F.R. § 501.2(c)(1). Thus, the Board is precluded from reviewing this additional 

evidence for the first time on appeal. Id.
2

ISSUES

The issues are: (1) whether appellant received an overpayment of compensation in the 

amount $7,782.95 during the period April 1, 2018 through September 25, 2020, as she continued 

to receive wage-loss compensation while a third-party surplus was outstanding; (2) whether it 

properly determined that appellant was at fault in the creation of the overpayment, thereby 

precluding waiver of recovery of the overpayment; (3) and whether OWCP properly required 

recovery of the overpayment by deduction of $500.00 every 28 days from appellant’s continuing 

compensation benefits. 

FACTUAL HISTORY

On June 6, 2002 appellant, then a 47-year-old rural carrier associate, filed a traumatic 

injury claim (Form CA-1) alleging that on June 3, 2002 she sustained nine puncture wounds on 

her legs from a dog attack while in the performance of duty. OWCP accepted the claim for bilateral 

open wounds of the ankles, knees, and legs, and a lumbar sprain under OWCP File No. xxxxxx657. 

Appellant returned to limited-duty work on June 10, 2002. OWCP paid her intermittent wage-loss 

compensation on the supplemental rolls from February 2, 2003 through October 12, 2007. 

On January 2, 2004 appellant accepted a modified rural carrier associate position. By 

decision dated April 28, 2004, OWCP found that the modified rural carrier associate position fairly 

and reasonably represented her wage-earning capacity with no loss in earning capacity.4 By 

decision dated January 29, 2020, it modified the April 28, 2004 loss of wage-earning capacity 

(LWEC) determination, and found that the LWEC had been issued in error. OWCP paid appellant

wage-loss compensation on its supplemental compensation rolls as of April 1, 2018 and on its 

periodic rolls as of January 3, 2021. 

The record reflects that on March 23, 2007 appellant’s then-counsel in the civil lawsuit 

against the dog owner, acknowledged OWCP’s subrogation lien in the amount of $56,728.52. In 

letters dated March 30, 2007 and January 25, 2008, then-counsel indicated that appellant’s surplus 

was higher than it should be and noted disputed amounts for travel expenses, which he noted could 

not be collected from the third party, and other questionable/unrelated charges. 

On May 18, 2007 OWCP received a Long Form Statement of Recovery (Form EN-1108) 

from appellant’s then-counsel. The form noted a gross recovery of $150,000.00, with the Federal 

Government’s statutory right to a refund in the amount of $23,572.70 and a surplus credit against 

future FECA benefits in the amount of $26,815.51. The record reflects that on May 18, 2007 

OWCP received a check in the amount of $23,572.70 in refund of compensation benefits paid. 

In a March 2, 2010 letter, OWCP informed appellant that original Form EN-1108 statement 

of recovery was recalculated. It advised that its disbursement was actually $59,098.36. OWCP 

noted that erroneous travel charges totaled $8,254.83 and other erroneous charges totaled 

$1,443.17, which were removed from the charge back on the case. It noted that additional wageloss compensation, which totaled $2,105.08, had been deducted from the surplus amount. 

Worksheets and a March 21, 2008 letter noting OWCP’s disbursement of $59,098.36 was 

4 Under OWCP File No. xxxxxx472, OWCP accepted a March 21, 2014 employment injury for right radial head 

fracture, right lunate fracture, left knee contusion, rib contusion, and left shoulder strain. It has administratively 

combined this file and OWCP File No. xxxxxx657, with OWCP File No. xxxxxx472 serving as the master file.
3

provided.

5

 OWCP advised that the credit against future FECA benefits was $7,782.95. It noted 

that it was due a refund of $33,912.43 and as it had recovered $23,572.70, an additional refund of 

$10,339.73 was due. An updated EN-1108 form labeled Exhibit 5, with handwritten figures, was 

provided. This indicated OWCP disbursements of $50,843.33, government allowance for 

attorney’s fee of $16,930.90 for a balance of $33,912.43. The remaining $11,331.23 surplus was 

reduced by $3,548.25 for a new surplus of $7,782.98.

6

 

By decision dated March 28, 2018, OWCP terminated appellant’s wage-loss compensation 

and medical benefits, effective January 7, 2018, with regard to her March 21, 2014 employment 

injury.7 By decision dated January 29, 2020, it modified her April 28, 2004 LWEC determination 

as it was issued in error. OWCPresumed payment of appellant’s claims for compensation effective 

April 1, 2018. 

On October 27, 2020 OWCP issued a preliminary overpayment determination of an 

overpayment of compensation in the amount of $7,782.95 for the period April 1, 2018 through 

September 25, 2020 because appellant received wage-loss compensation during a period of a thirdparty surplus. It noted that on March 2, 2010 she was advised that her third-party surplus balance 

was $7,782.95. OWCP indicated that appellant received wage-loss compensation from April 1, 

2018 through September 25, 2020 in the amount of $46,830.14 and that there was no indication 

on file from March 3, 2010 through April 1, 2018 when the wage-loss compensation resumed or 

on January 30, 2020 when it keyed in the wage-loss compensation, that there was any evidence of 

payment for medical treatment she paid out of pocket related to the accepted conditions to show 

that the third-party surplus balance of $7,782.95 had been absorbed. It found that she was at fault 

in the creation of the overpayment because she knowingly accepted payments which she knew or 

reasonably should have known were incorrect. Copies of OWCP’s letters and worksheets 

pertaining to the third-party surplus of $7,782.95 were included. OWCP requested that appellant 

complete the enclosed overpayment recovery questionnaire (Form OWCP-20) and submit 

supporting financial documentation. Additionally, it provided her with an overpayment action 

request form and notified her that, within 30 days of the date of the letter, she could request a 

telephone conference, a final decision based on the written evidence, or a prerecoupment hearing. 

In an October 27, 2020 memorandum to file, OWCP noted that appellant had $7,782.95 

credit against future benefits. It indicated that it paid $46,830.14 in wage-loss compensation to 

her for the period April 1, 2018 through September 25, 2020 without exhaustion of the $7,782.95 

surplus. Copies of OWCP’s letters and worksheets pertaining to the third-party surplus of 

$7,782.95 were included. 

5

In a March 21, 2008 letter, OWCP advised appellant that OWCP’s disbursements were $59,098.36, which 

included wage-loss compensation of $10,301.95 and bills of $48,796.41. It noted that compensation due herfor the 

October 22 through November 23, 2007, which totaled $1,194.48, could be used to reduce the credit against future 

benefits and that a bill specialist will be reviewing the disputed charges of her surplus. OWCP further advised no 

further benefits could be paid until appellant’s third-partysurplus was reduced to zero. 

6 The statement of recovery indicated that the total was $7,782.95. However, this appears to be a minor error as the 

correct calculation equals $7,782.98.

7

See supra note 4.
4

On November 4, 2020 appellant requested a prerecoupment hearing before a representative 

of OWCP’s Branch of Hearings and Review regarding possible waiver as she believed that the 

overpayment occurred through no fault of her own. 

On November 18, 2020 appellant submitted a completed Form OWCP-20, noting

$55,000.00 in assets. She indicated that she had no recollection of OWCP’s 2010 letter regarding 

the surplus as over 10 years had passed. Appellant also contended that recovery of the 

overpayment would delete her retirement savings to almost half. 

An oral hearing was held on February 19, 2021. 

On March 16, 2021 OWCP received from appellant copies of cancelled checks payable to 

her physician from 2015, 2016, and 2017 and a listing of checks from her ledger from 2010 to 

2013 as the bank no longer had copies. Appellant also included copies of an insurance profile of 

prescriptions from one pharmacy from January 1, 2008 through March 11, 2019, a medical 

expense summary from another pharmacy for the period January 1, 2010 through March 2, 2021,

and bills from a medical provider noting services for workers’ compensation from 2002. 

By decision dated April 14, 2021, OWCP’s hearing representative finalized the 

preliminary overpayment determination that appellant had received an overpayment of 

compensation in the amount of $7,782.95 for the period April 1, 2018 through September 25, 2020 

because she accepted wage-loss compensation when a third-party surplus was outstanding. The 

hearing representative found that appellant was at fault in the creation of the overpayment because 

she knew or reasonably should have known that appellant was not entitled to compensation 

benefits until the surplus was exhausted. Consequently, she found that waiver of recovery of the 

overpayment was precluded. The hearing representative determined that the overpayment be 

recovered by deducting $500.00 from appellant’s continuing compensation payments every 28 

days. 

LEGAL PRECEDENT -- ISSUE 1

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

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

duty.8 Section 8132 of FECA outlines 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 her in his or her behalf, the beneficiary, after deducting there from the 

costs of suit and a reasonable attorney’s fee, shall refund to the United States the amount of 

compensation paid by the United States and credit any surplus on future payments of compensation 

to him or her for the same injury.9 The applicable regulations reiterate that, after the refund owed 

to the United States is calculated, FECA beneficiary retains any surplus remaining and this amount 

is credited, dollar for dollar, against future compensation for the same injury.10 OWCP will resume 

8

5 U.S.C. § 8102.

9

Id. at § 8132. See R.M., Docket No. 20-0686 (issued May 20, 2020); E.K., Docket No. 18-0599 (issued 

February26, 2020);see also T.D.,Docket No. 16-0565 (issued May 5, 2016).

10 20 C.F.R. § 10.712.
5

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

exceeds the amount of the surplus.11 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, this may result in an overpayment of compensation. 12 Such an 

overpayment of compensation should be adjudicated and processed by OWCP according to the 

usual overpayment procedures.13

ANALYSIS -- ISSUE 1

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation during the period April 1, 2018 through September 25, 2020 as she continued to 

receive wage-loss compensation while a third-party surplus was outstanding.

Appellant received a third-party recovery of $150,000.00. A Form EN-1108 received by 

OWCP on May 18, 2007 provided the calculations regarding offsets and disbursements previously 

made. It found a remaining surplus of $26,815.51. On May 2, 2010 OWCP amended Form EN1108. It found a remaining surplus of $11,331.23. Additional handwritten notes indicated that the 

surplus was further reduced by $3,548.25, leaving a surplus credit against future benefits in the 

amount of $7,782.95.

The case record, however, establishes that OWCP paid appellant wage-loss compensation 

from April 1, 2018 through September 25, 2020 in the amount of $46,830.14. As noted above, 

OWCP’s regulations provide that future compensation payments are to be charged against a 

surplus until it has been exhausted.14 Thus, the Board finds that an overpayment of compensation 

during the period April 1, 2018 through September 25, 2020 was created.

The Board further finds, however, that the case is not in posture for decision with regard

to the amount of the overpayment.

In its October 27, 2020 preliminary overpayment determination, OWCP found that there 

was no indication that appellant had paid out of pocketfor medical treatment related to the accepted 

conditions, to support that the third-party surplus balance of $7,782.95 had been absorbed. 

Appellant, however, subsequently submitted copies of cancelled checks paid to her physician 

during the relevant time frame, copies of an insurance profile of prescriptions from one pharmacy 

from January 1, 2008 through March 11, 2019; a medical expense summary from another 

pharmacy for the period January 1, 2010 through March 2, 2021; and bills from a medical provider 

noting services for workers’ compensation since 2002. She claimed that those out-of-pocket

expenses for her employment injury should have been deducted from her surplus. In finalizing the 

overpayment determination, OWCP’s hearing representative did not discuss or consider this 

evidence or its effect, if any, on the surplus balance amount.

11 Id.

12 Federal (FECA) Procedure Manual, Part 2 -- Claims, Third-Party Subrogation Guidelines, Chapter 2.1100.10 

(March 2006).

13 Id.; see S.M., Docket No. 21-0449 (issued October 25, 2021).

14 20 C.F.R. § 10.712;S.M.,supra note 13; E.K., Docket No. 18-0599 (issued February 26, 2020).
6

The Board has held that, in overpayment cases, it is essential that OWCP provide the 

recipient of compensation with a clear statement showing how the overpayment was calculated.15 

As it remains unclear whether OWCP correctly calculated the overpayment for the period April 1, 

2018 through September 25, 2020, the Board finds that this case must be remanded to OWCP. 

On remand, OWCP shall clarify whether appellant is entitled to any deduction from the 

surplus in light of the newly submitted evidence. It shall then recalculate the amount of the

overpayment of compensation and issue a new preliminary overpayment determination, with an

overpayment action request form, a new Form OWCP-20, and instructions for her to provide 

updated supporting documentation. Following this, and other such further development as deemed 

necessary, OWCP shall issue a de novo decision.16

CONCLUSION

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation during the period April 1, 2018 through September 25, 2020 as she continued to 

receive wage-loss compensation while a third-party surplus was outstanding. However, the case 

is not in posture for decision with regard to the amount of the overpayment.17

15 C.T., Docket No. 21-1299 (issued May 13, 2022). 

16 G.R., id.; S.H., Docket No. 20-1189 (issued January 27, 2021).

17 In light of the Board’s disposition of Issue 1, Issues 2 and 3 are rendered moot.
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ORDER

IT IS HEREBY ORDERED THAT the April 14, 2021 decision of the Office of Workers’

Compensation Programs is affirmed in part and set aside in part. This case is remanded for further 

proceedings consistent with this decision of the Board.

Issued: June 6, 2022

Washington, DC

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board