Court Opinion

ID: 3024681
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:32:05.604261+00
Date Added: 2024-06-11T09:38:40.282056
License: Public Domain

United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 99-2151
                                    ___________

Peter J. Sallas,                         *
                                         *
              Petitioner,                * On Petition for Review
                                         * of an Order of the Railroad
       v.                                * Retirement Board
                                         *
Railroad Retirement Board,               * [To Be Published]
                                         *
              Respondent.                *
                                    ___________

                            Submitted: March 3, 2000
                                Filed: May 1, 2000
                                    ___________

Before RICHARD S. ARNOLD, BOWMAN, and BEAM, Circuit Judges.
                           ___________

PER CURIAM.

       Peter J. Sallas petitions for review of the decision of the Railroad Retirement
Board (RRB) denying a waiver of recovery of overpaid benefits. We grant Mr. Sallas’s
petition and reverse the RRB’s decision.

      Mr. Sallas, born on April 18, 1922, was a railroad employee from May 1956
through May 31, 1984. For several years, he had also worked part-time as a clerk at
Berbiglia, Inc., a liquor store. Mr. Sallas quit his Berbiglia employment in April 1984
because his railroad employment caused him to travel to Kansas, Colorado, Nebraska,
and Missouri. Mr. Sallas’s railroad employer subsequently advised him that his office
was moving from Kansas City, Missouri, to Omaha, Nebraska. This proposed move
induced Mr. Sallas to accept a “buy-out” from his railroad employer, and he took early
retirement. In June 1984, Mr. Sallas applied to the RRB for an employee annuity; he
did not list his Berbiglia employment as a non-railroad job held during the last twelve
months that he had worked in the railroad industry. Mr. Sallas was awarded benefits.

      In 1985, Berbiglia’s owner asked Mr. Sallas to come back, and he began
working for Berbiglia again. Although he did not inform the RRB that he had gone
back to work, in 1990 he contacted the RRB by telephone to inform it that he had
exceeded his earnings limit. In June 1991, Mr. Sallas’s spouse applied for and received
a spouse annuity.

       In a December 1994 letter, the RRB notified Mr. Sallas that (1) under the
provisions of the 1974 Railroad Retirement Act (Act), 45 U.S.C. §§ 231, 231a-231u,
he was ineligible to receive an annuity from June 1984 through November 1998
because he had failed to cease all compensated service for his last preretirement non-
railroad employer (LPE),1 namely, Berbiglia; (2) although a December 1988
amendment to the Act allowed Mr. Sallas to continue working for his LPE, post-
amendment employment with the LPE still had the effect of reducing his benefits; and
(3) he was not entitled to a supplemental annuity because his continuing work for
Berbiglia had broken his “current connection” with the railroad. The RRB concluded
that Mr. Sallas had received an overpayment of $87,494.06 in railroad retirement
benefits, which he had to repay. The RRB likewise notified Mrs. Sallas that she would

      1
       The RRB also refers to this as “last person” employment. See 45 U.S.C.
§ 231a(e)(3) (1982); Davenport v. Railroad Retirement Bd., 453 F.2d 185, 187 (5th
Cir. 1972).
                                          -2-
be responsible for repayment of a $2,738.60 overpayment. The Sallases requested
review and waiver of recovery.

       Following a hearing, the hearing officer found that Mr. Sallas had a net
overpayment of $38,625.40; partial recovery (the difference between the erroneous
payment and Mr. Sallas’s Berbiglia earnings for the years prior to 1988) was waived
because the Act’s 1988 amendment allowed an annuitant to work for his last non-
railroad employer. The hearing officer concluded, however, that recovery of the
$38,625.40 could not be waived because Mr. Sallas was at fault in causing the
overpayment. Specifically, the officer found that (1) Berbiglia was Mr. Sallas’s LPE
before his railroad retirement; and (2) Mr. Sallas had acted negligently when he failed
to disclose his Berbiglia employment on his annuity application, and his negligence had
“caused the overpayment because it interfered with the [RRB’s] efforts to put him on
notice that returning to work [for] this last employer, even if he had low earnings,
would impact his annuity.” The officer found that Mrs. Sallas had a net overpayment
of $3,889.54, and that recovery would not be contrary to the purpose of the Act, or
against equity or good conscience.

       In January 1999, a majority of the RRB affirmed the hearing officer’s decision
with respect to Mr. Sallas, but remanded as to Mrs. Sallas for a supplemental decision
as to “whether recovery of her overpayment would be contrary to the purpose of the
Act or against equity or good conscience, specifically taking into consideration
recovery of the overpayment from Mr. Sallas.” One member dissented, stating that he
did not consider Mr. Sallas’s employment with Berbiglia to be “last pre-retirement
employment.” Noting that Mr. Sallas had quit this non-railroad employment because
it conflicted with his railroad work schedule, and that he had not intended to retire from
the railroad when he did but was induced to so do by a “buy-out” offer, the dissenting
member concluded that Mr. Sallas did not quit Berbiglia for the purpose of retirement.

                                           -3-
       Our review of an RRB decision is limited to determining whether it " 'is
supported by substantial evidence, is not arbitrary, and has a reasonable basis in law.' "
See King v. Railroad Retirement Bd., 981 F.2d 365, 367 (8th Cir. 1992) (per curiam)
(quoted case omitted). In the absence of fraud, we affirm the RRB’s findings of fact
if they are supported by the evidence. See id.

       Prior to December 1, 1988, to become entitled to a retirement annuity, an
individual had to cease all railroad employment, and all compensated service for any
LPE, as shown by the following language in the Act:

             (1) No individual shall be entitled to an annuity under subsection
      (a)(1) of this section until he shall have ceased to render compensated
      service to any person, whether or not an employer defined in section
      231(a) of this title. . . .

             ...

             (3) No annuity under subsection (a)(1) of this section . . . shall be
      paid with respect to any month in which an individual in receipt of an
      annuity . . . thereunder shall render compensated service to an employer
      or to the last person, or persons, by whom he was employed prior to the
      date on which the annuity . . . began to accrue.

45 U.S.C. § 231a(e) (1982). Effective December 1, 1988, this section was revised so
that the retiree no longer has to stop working for his LPE to receive an annuity,
although benefits will be reduced if the retiree does not do so. See 45 U.S.C. § 231a(e)
(1994).

      We conclude that substantial evidence does not support the RRB’s finding that
Berbiglia was Mr. Sallas’s LPE, because his uncontroverted testimony was that he quit

                                           -4-
Berbiglia in April 1984 because of the increased travel requirements of his railroad
employment, and that he did not intend to retire when he did, but was induced to do so
by a buy-out offer after being informed that he was being transferred to Omaha.2 See
20 C.F.R. § 216.22(b) (1999) (individual’s LPE is any non-railroad employer from
whom individual last resigned in order to receive an annuity; in absence of evidence to
contrary, employment terminated within 6 months of annuity application is presumed
to be service from which individual resigned in order to receive annuity).

       Because our determination that Berbiglia was not Mr. Sallas’s LPE results in the
conclusion that no overpayment of benefits occurred, the RRB incorrectly denied Mr.
Sallas’s request for waiver of recovery.

      Accordingly, we reverse the decision of the RRB.

      A true copy.

             Attest:

                         CLERK, U.S. COURT OF APPEALS EIGHTH CIRCUIT.

      2
        The RRB argues that Berbiglia’s status as an LPE is not properly before us,
because Mr. Sallas limited his arguments below to the waiver issue. However, as
discussed, the dissenting member’s opinion in the RRB’s decision squarely addresses
this issue.
                                          -5-