Court Opinion

ID: 211198
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:24:42+00
Date Added: 2024-06-11T08:14:53.350011
License: Public Domain

United States Court of Appeals for the Federal Circuit

                                        05-3364

                             PATRICIA A. HERNANDEZ,

                                                              Petitioner,

                                           v.

                     OFFICE OF PERSONNEL MANAGEMENT,

                                                              Respondent.

      Patricia A. Hernandez, of Bonita, California, pro se.

       Steven J. Abelson, Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, of Washington, DC, for respondent. With him on the brief
were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; and
Franklin E. White, Jr., Assistant Director.

Appealed from: United States Merit Systems Protection Board
 United States Court of Appeals for the Federal Circuit
                                         05-3364

                               PATRICIA A. HERNANDEZ,

                                                                   Petitioner,

                                            v.

                        OFFICE OF PERSONNEL MANAGEMENT,

                                                                   Respondent.

             __________________________________________________

             NONPRECEDENTIAL DECISION ISSUED:      March 10, 2006
             PRECEDENTIAL OPINION ISSUED:          June 21, 2006
             __________________________________________________

Before RADER, Circuit Judge, CLEVENGER, Senior Circuit Judge, and DYK, Circuit
Judge.

DYK, Circuit Judge.

      Patricia A. Hernandez (“Ms. Hernandez”) appeals the final decision of the Merit

Systems Protection Board (the “Board”) affirming the decision of the Office of Personnel

Management (“OPM”) denying her request for survivor annuity benefits under the Civil

Service Retirement System (“CSRS”). We affirm.1

                                   BACKGROUND

      Ms. Hernandez married Juan Hernandez (“Mr. Hernandez”) on June 18, 1976.

Mr. Hernandez filed for CSRS retirement annuity benefits effective May 1, 1999,

electing reduced annuity payments to provide survivor benefits for his spouse. Mr. and

      1
             This opinion was originally issued on March 10, 2006, as non-
precedential. The panel has granted the respondent’s Request that the Court’s March
10, 2006, Opinion Be Reissued as Precedential.
Ms. Hernandez divorced on August 17, 2001.           The marital separation agreement

(“MSA”) allocated “Retirement benefits from [Mr. Hernandez’s] employment through the

Federal Government . . . TO HUSBAND.” App. at 2.

      Mr. Hernandez informed OPM of the divorce and inquired about terminating

surviving spouse benefits by letter dated December 25, 2001. OPM in a letter to Mr.

Hernandez dated February 23, 2002, responded: “If you would like to terminate your

survivor election please forward your divorce decree to [OPM] . . . . Upon receipt of

your divorce decree we should be able to give you the amount of your annuity

recalculation.” App. at 24. On September 16, 2002, Mr. Hernandez informed OPM by

telephone that he had forwarded a copy of the MSA to OPM and that he wanted to

terminate survivor benefits. The record does not disclose whether OPM received the

MSA; Ms. Hernandez alleges that Mr. Hernandez’s annuity was never increased to

reflect termination of the survival election.   Annual written notices distributed to all

CSRS annuitants between 1989 and 2003 stated that “retirees are eligible to elect a

reduced annuity to provide a survivor annuity for a former spouse if they send a signed

request to OPM . . . within 2 years after the date the marriage ended by divorce or

annulment . . . .” App. at 6. Mr. Hernandez never explicitly elected former spouse

benefits for his former spouse, Ms. Hernandez. Mr. Hernandez died February 4, 2004.

      OPM denied Ms. Hernandez’s request for survivor benefits on June 22, 2004.

Ms. Hernandez appealed to the Board, which affirmed OPM’s determination in an initial

decision issued December 17, 2004.        The Board concluded that under 5 C.F.R.

§ 831.632, because they divorced, Mr. Hernandez was required to make an affirmative

election to grant Ms. Hernandez former-spousal survivor benefits; that OPM had

05-3364                                     2
properly notified Mr. Hernandez of this requirement; that Mr. Hernandez had neither

expressly nor impliedly made such an election; and that Mr. Hernandez did not intend to

afford Ms. Hernandez survivor benefits after the divorce. The Board also found no

provision in the MSA granting Ms. Hernandez survivor annuity benefits. The Board

denied Ms. Hernandez’s petition for review of the initial decision on July 21, 2005.

       Ms. Hernandez timely appealed to this court, and we have jurisdiction pursuant

to 28 U.S.C. § 1295(a)(9).

                                      DISCUSSION

       We must affirm the Board’s decision unless it was arbitrary, capricious, an abuse

of discretion, or otherwise not in accordance with law; obtained without procedures

required by law, rule or regulation; or unsupported by substantial evidence. 5 U.S.C.

§ 7703(c) (2000); Yates v. Merit Sys. Prot. Bd., 145 F.3d 1480, 1483 (Fed. Cir. 1998).

       Divorce terminates a prior election of spousal survivor benefits.         5 U.S.C.

§ 8339(j)(5)(A) (2000). A former spouse may receive survivor benefits if the CSRS

annuitant makes an affirmative election to grant such benefits. 5 U.S.C. § 8339(j)(3)

(2000). The government must “on an annual basis, inform each annuitant of such

annuitant’s rights of election under section 8339(j).”    5 U.S.C. § 8339 note (2000).

Congress’ enactment of this notice requirement “means that the information must be

correct and not misleading.” Wood v. Office of Pers. Mgmt., 241 F.3d 1364, 1367 (Fed.

Cir. 2001). A former spouse may receive survivor annuity benefits even without an

affirmative election by the annuitant if (1) the annuitant did not receive the required

notice, and (2) “there [is] evidence sufficient to show that the retiree indeed intended to

05-3364                                     3
provide a survivor annuity for the former spouse.” Id. at 1368; Vallee v. Office of Pers.

Mgmt., 58 F.3d 613, 616 (Fed. Cir. 1995).

       In Simpson v. Office of Personnel Management, 347 F.3d 1361, 1365 (Fed. Cir.

2003), we held that notice is insufficient if it does not “stat[e] that a pre-divorce election

automatically terminates upon divorce and that an annuitant must make a new election

to provide a survivor annuity for a former spouse.” The annual notices Mr. Hernandez

received made neither of these statements—rather, they stated that an annuitant is

“eligible to elect” survivor benefits for a former spouse and that the election may be

made by a “signed request to OPM.” The notice here does not make clear that such a

written election is required for survivor benefits to continue after divorce. In Wood, we

also held that notice is insufficient if it does not inform the annuitant “that his continued

receipt of a reduced annuity would not suffice to constitute an election.” 241 F.3d at

1367. No notice was given here to inform Mr. Hernandez that “continued receipt of a

reduced annuity would not suffice to constitute an election.” After receiving the annual

notices Mr. Hernandez, who, we assume, continued to receive the reduced annuity

required to provide survivor benefits, could still have reasonably concluded that his pre-

divorce election remained effective after the divorce, and that no further action was

required to preserve Ms. Hernandez’s survivor benefits.             Thus, the notice was

insufficient to inform Mr. Hernandez that, after divorce, a written reelection of survivor

benefits was required. Under Simpson, OPM’s annual notice was legally insufficient.

       Nevertheless, the Board’s decision was supported by substantial evidence

despite the inadequacy of the notice. Under Wood, inadequate notice only entitles a

former spouse to benefits if there is sufficient evidence that the annuitant intended the

05-3364                                       4
former spouse to receive such benefits. Ms. Hernandez asserts that although OPM

never increased Mr. Hernandez’s annuity payments after he requested discontinuance

of survivor benefits, Mr. Hernandez did not contact OPM again regarding his annuity

after the September 16, 2002, telephone call.2      We have held that “an employee’s

continued acceptance of a reduced annuity following divorce, standing alone,

adequately demonstrate[s] that employee’s intent to provide a survivor annuity for the

former spouse,” Wood, 241 F.3d at 1368. Here, however, Mr. Hernandez’s continued

acceptance of a reduced annuity does not stand alone. The Board found that Mr.

Hernandez took affirmative steps to discontinue survival benefits for Ms. Hernandez

after the divorce.   Such actions are fundamentally inconsistent with the intent to

continue to provide such benefits. We thus conclude that the Board’s decision to affirm

the denial of survivor benefits is supported by substantial evidence.

                                     CONCLUSION

      The Board’s decision is

      AFFIRMED.

                                         COSTS

      No costs.

      2
              Mr. Hernandez’s will, executed November 24, 2003, provides in pertinent
part that Mr. Hernandez’s “[OPM] insurance policy shall be distributed to Patricia
Hernandez (per policy survivor benefits).” App. at 27. Ms. Hernandez insists that this
provision is pertinent to Mr. Hernandez’s intent regarding survivor benefits. We agree
with the Board that this provision is irrelevant because it bequeaths an insurance policy
and does not relate to CSRS survivor annuity benefits.

05-3364                                     5