Court Opinion

ID: 4032525
Source: CourtListenerOpinion
Date Created: 2016-09-09 17:00:23.988305+00
Date Added: 2024-06-11T14:08:56.524417
License: Public Domain

UNITED STATES OF AMERICA
                        MERIT SYSTEMS PROTECTION BOARD

     SAMUEL VONZELL GORDON,                          DOCKET NUMBER
                 Appellant,                          CH-0845-16-0204-I-1

                  v.

     OFFICE OF PERSONNEL                             DATE: September 9, 2016
       MANAGEMENT,
                   Agency.

             THIS FINAL ORDER IS NONPRECEDENTIAL 1

           Samuel Vonzell Gordon, South Holland, Illinois, pro se.

           Karla W. Yeakle, Washington, D.C., for the agency.

                                           BEFORE

                              Susan Tsui Grundmann, Chairman
                                 Mark A. Robbins, Member

                                       FINAL ORDER

¶1         The appellant has filed a petition for review of the initial decision, which
     sustained the reconsideration decision of the Office of Personnel Management
     (OPM). Generally, we grant petitions such as this one only when: the initial
     decision contains erroneous findings of material fact; the initial decision is based

     1
        A nonprecedential order is one that the Board has determined does not add
     significantly to the body of MSPB case law. Parties may cite nonprecedential orders,
     but such orders have no precedential value; the Board and administrative judges are not
     required to follow or distinguish them in any future decisions. In contrast, a
     precedential decision issued as an Opinion and Order has been identified by the Board
     as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
                                                                                        2

     on an erroneous interpretation of statute or regulation or the erroneous application
     of the law to the facts of the case; the administrative judge’s rulings during either
     the course of the appeal or the initial decision were not consistent with required
     procedures or involved an abuse of discretion, and the resulting error affected the
     outcome of the case; or new and material evidence or legal argument is available
     that, despite the petitioner’s due diligence, was not available when the record
     closed. See title 5 of the Code of Federal Regulations, section 1201.115 (5 C.F.R.
     § 1201.115). After fully considering the filings in this appeal, we conclude that
     the petitioner has not established any basis under section 1201.115 for granting
     the petition for review.     Therefore, we DENY the petition for review and
     AFFIRM the initial decision, which is now the Board’s final decision. 5 C.F.R.
     § 1201.113(b).
¶2         In April 2009, OPM notified the appellant that it approved his application
     for disability retirement benefits under the Federal Employees’ Retirement
     System (FERS) and he would receive interim disability payments. Initial Appeal
     File (IAF), Tab 10 at 63. The notice also informed the appellant that his FERS
     disability benefit must be reduced by any Social Security disability benefits and
     that Social Security checks should not be negotiated until the FERS benefit had
     been reduced.    Id.   The appellant began receiving Social Security benefits in
     May 2009.    IAF, Tab 12, Exhibit C.      On January 22, 2012, OPM notified the
     appellant that it had finalized his annuity computation and that he had been
     overpaid $33,127.42 in interim benefits. IAF, Tab 10 at 14. OPM determined to
     collect the overpayment in monthly installments of $127.96. Id. The appellant
     requested reconsideration, id., and OPM affirmed the overpayment amount in a
     reconsideration decision, but, based on the information that the appellant
     submitted on his Financial Resources Questionnaire (FRQ), OPM reduced the
     monthly repayment amount to $50, id. at 6.
¶3         The appellant appealed OPM’s reconsideration decision. IAF, Tab 1. The
     administrative judge found that OPM proved the existence and amount of the
                                                                                             3

     overpayment. IAF, Tab 18, Initial Decision (ID) at 8. She also found that the
     appellant failed to show that recovery of the overpayment at $50 per month would
     cause him financial hardship.      ID at 10.    She found further that the appellant
     failed to show that recovering the overpayment would be against equity and good
     conscience based on his relinquishing a valuable right or changing his position
     for the worse. ID at 12. Additionally, she found that OPM’s delay of nearly
     3 years in notifying the appellant of the overpayment was not so harsh that
     recovery of the overpayment would be unconscionable and that OPM’s conduct in
     this matter did not rise to the level of exceptional circumstances justifying a
     waiver of the overpayment based on unconscionability. ID at 13.
¶4         In his petition for review, 2 the appellant reiterates the argument that his
     overpayment should be waived. He asserts that he lost valuable benefits from the
     Department of Veterans Affairs (VA) and the State of Illinois because OPM
     reported his interim payments as income to the Internal Revenue Service. He
     argues that, because his combined income from his FERS annuity and his Social
     Security annuity were reported, the VA and the State of Illinois deemed his
     income too high to qualify for services. 3

     2
        In his petition, the appellant claims that, during proceedings below, he observed
     collusion between the administrative judge and OPM’s representative. To the extent
     that the appellant is alleging that the administrative judge was biased in favor of the
     agency in her adjudication, we find nothing in the record to support the appellant’s
     assertion. See Oliver v. Department of Transportation, 1 M.S.P.R. 382, 386 (1980)
     (finding that, in making a claim of bias or prejudice against an administrative judge, a
     party must overcome the presumption of honesty and integrity that accompanies
     administrative adjudicators).
     3
       As noted, the administrative judge found that OPM’s calculation of the overpayment
     was mathematically correct and that the appellant was overpaid $33,127.42. ID at 8.
     The administrative judge made a detailed review of OPM’s complex calculation of the
     appellant’s overpayment, which included reducing the appellant’s FERS disability
     annuity because he received Social Security benefits (subject to the minimum disability
     annuity provision in 5 C.F.R. § 844.303) and because of the cost of the health and life
     insurance benefits that the appellant elected, the cost of which his annuity was
     insufficient to cover. ID at 6-8. Although the appellant states in his petition for review
     that “OPM's calculations . . . are still in dispute,” PFR File, Tab 1 at 7, he has not
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¶5         Waiver of an annuity overpayment may be granted when the annuitant is
     without fault and recovery would be against equity and good conscience. Knox v.
     Office of Personnel Management, 107 M.S.P.R. 353, ¶ 5 (2007).                   Generally,
     recovery is against equity and good conscience when it would cause financial
     hardship, the annuitant can show that, because of the overpayment, he
     relinquished a valuable right or changed positions for the worse, or recovery
     could be unconscionable under the circumstances.              Id., ¶ 8.   Individuals who
     know or suspect that they are receiving overpayments are expected to set aside
     the amount overpaid pending recoupment, and, absent exceptional circumstances,
     which do not include financial hardship, recovery in these cases is not against
     equity    and    good     conscience.        Wright      v.      Office    of   Personnel
     Management, 105 M.S.P.R. 419, ¶ 4 (2007). Exceptional circumstances involve
     OPM’s egregious errors or delays, such as a failure to issue a written decision
     within 4 years of a request for waiver.            Dorrello v. Office of Personnel
     Management, 91 M.S.P.R. 535, ¶ 7 (2002).              The set-aside rule goes to the
     question of whether recovery would be against equity and good conscience, not
     whether the annuitant is at fault in the overpayment.               Maseuli v. Office of
     Personnel Management, 111 M.S.P.R. 439, ¶ 8 (2009).
¶6         The appellant bears the burden of establishing his entitlement to a waiver
     by substantial evidence.      5 C.F.R. § 831.1407(b); see Hudson v. Office of
     Personnel Management, 87 M.S.P.R. 385, ¶ 7 (2000). Substantial evidence is
     defined as the degree of relevant evidence that a reasonable person, considering
     the record as a whole, might accept as adequate to support a conclusion, even
     though other reasonable persons might disagree.                 5 C.F.R. §§ 1201.4(q),
     1201.56(b)(2)(ii).

     challenged the specifics of the administrative judge’s finding on this matter. As the
     specifics of the administrative judge’s finding on this issue are uncontested on petition
     for review, and we find no error in it, we will not further address this issue in this
     Order. See 5 C.F.R. § 1201.115 (the Board normally will consider only issues raised in
     a timely filed petition for review or in a timely filed cross petition for review).
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¶7           Here, as the administrative judge correctly found, the appellant is without
     fault. However, the set-aside rule applies. The appellant did not deny that he
     received OPM’s letters discussing both the effect of a Social Security disability
     benefits award on his FERS disability retirement benefits and the set-aside
     requirement. The appellant was, therefore, aware of the set-aside requirement
     and should have anticipated that he was receiving an overpayment that he
     eventually would need to repay. IAF, Tab 10 at 63.
¶8           The administrative judge addressed the appellant’s assertion that he lost
     valuable benefits from the VA and the State of Illinois because OPM reported his
     interim payments as income to the Internal Revenue Service. OPM’s regulations
     state, in relevant part for this appeal, that recovery of an overpayment is against
     equity and good conscience when “[t]he recipient of the overpayment can show
     (regardless of his or her financial circumstances) that due to the notice that such
     payment would be made or because of the incorrect payment he or she either has
     relinquished a valuable right or has changed positions for the worse.” 5 C.F.R.
     § 845.303(b). The Board has applied OPM’s criteria for evaluating claims of this
     type.    See Alexander v. Office of Personnel Management, 58 M.S.P.R. 358,
     364-65 (1993). OPM’s criteria are as follows: (a) the relinquishment or change
     must be directly caused by the overpayment or notice that such payment would be
     made (i.e., loss or change would not have otherwise occurred); (b) it must be
     detrimental to the overpayment recipient; (c) it must be material (i.e., significant
     enough to warrant the waiver); and (d) it must be irreversible (i.e., the forfeited
     right cannot be recovered, the change of position cannot be reversed).
¶9           Here, the appellant was subject to the set-aside rule as he had been informed
     that receiving Social Security benefits was erroneous.          We agree with the
     administrative judge that, under these circumstances, the relinquishment of the
     appellant’s right to the VA and the Illinois state benefits was not caused directly
     by the overpayment of FERS disability benefits. There is no evidence that the
     appellant made an effort to inform the VA or the Illinois state authorities, who
                                                                                              6

      oversaw the benefits that he sought, that the income that was reported by OPM to
      the Internal Revenue Service was erroneous, i.e., falsely inflated by OPM’s
      failure to reduce the appellant’s FERS benefit as of the date of his receiving
      Social Security benefits. Absent proof of such effort and a showing that it failed
      to persuade the VA and the state authorities to allow him the benefits to which he
      would have been entitled at a lower income level, we find that the appellant failed
      to show by substantial evidence that he is entitled to a waiver on the basis that he
      relinquished a valuable right because of the incorrect payment.
¶10         Even when waiver of recovery is not appropriate, the repayment schedule
      may be adjusted based on financial hardship. 5 C.F.R. § 845.301. The appellant
      bears the burden of proving by substantial evidence his entitlement to the
      repayment schedule adjustment. 5 C.F.R. § 845.307(b). The appellant submitted
      a FRQ to OPM in February 2012. IAF, Tab 10 at 17. That FRQ shows that the
      appellant has a monthly income of $3,176 and monthly expenses of $4,653. Id.
      As noted, based on the financial information in the FRQ, OPM reduced the
      appellant’s scheduled monthly payment on his overpayment debt to $50.                 We
      agree with the administrative judge that, because of the appellant’s failure to
      submit an updated FRQ while his appeal has been pending before the Board in
      2016, he has failed to meet his burden to show by substantial evidence that his
      repayment schedule should be further adjusted. 4

      4
        In his petition for review, the appellant alleges that he was hired and discriminatorily
      fired by the U.S. Postal Service after he began receiving the FERS disability annuity.
      During the prehearing conference, the appellant indicated that his retirement from the
      U.S. Postal Service may have been involuntary and that he may have suffered
      discrimination by the U.S. Postal Service. IAF, Tab 11. The administrative judge
      correctly informed the appellant that, if he wished to challenge these actions, he must
      file a separate Board appeal against his former agency and demonstrate that the appeal
      was timely filed. Id.
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                 NOTICE TO THE APPELLANT REGARDING
                    YOUR FURTHER REVIEW RIGHTS
      You have the right to request review of this final decision by the U.S.
Court of Appeals for the Federal Circuit. You must submit your request to the
court at the following address:
                          United States Court of Appeals
                              for the Federal Circuit
                            717 Madison Place, N.W.
                             Washington, DC 20439

The court must receive your request for review no later than 60 calendar days
after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec. 27,
2012). If you choose to file, be very careful to file on time. The court has held
that normally it does not have the authority to waive this statutory deadline and
that filings that do not comply with the deadline must be dismissed. See Pinat v.
Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).
      If you need further information about your right to appeal this decision to
court, you should refer to the Federal law that gives you this right. It is found in
title 5 of the U.S. Code, section 7703 (5 U.S.C. § 7703) (as rev. eff. Dec. 27,
2012). You may read this law as well as other sections of the U.S. Code, at our
website, http://www.mspb.gov/appeals/uscode.htm.        Additional information is
available at the court’s website, www.cafc.uscourts.gov. Of particular relevance
is the court’s “Guide for Pro Se Petitioners and Appellants,” which is contained
within the court’s Rules of Practice, and Forms 5, 6, and 11.
      If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website
at   http://www.mspb.gov/probono       for   information    regarding   pro    bono
representation
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for Merit Systems Protection Board appellants before the Federal Circuit. The
Merit Systems Protection Board neither endorses the services provided by any
attorney nor warrants that any attorney will accept representation in a given case.

FOR THE BOARD:                            ______________________________
                                          Jennifer Everling
                                          Acting Clerk of the Board
Washington, D.C.