Court Opinion

ID: 211627
Source: CourtListenerOpinion
Date Created: 2011-03-13 08:29:35+00
Date Added: 2024-06-11T17:28:07.390416
License: Public Domain

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition
                       is not citable as precedent. It is a public record.

United States Court of Appeals for the Federal Circuit
                                         05-3068

                                STEVEN H. FRIEDMAN,

                                                                     Petitioner,

                                            v.

                      OFFICE OF PERSONNEL MANAGEMENT,

                                                                     Respondent.

                         ___________________________

                         DECIDED: October 12, 2005
                         ___________________________

Before MAYER, CLEVENGER, DYK, Circuit Judges.

PER CURIAM.

      Steven H. Friedman petitions for review of the decision of the Merit Systems

Protection Board (“Board”), upholding the refusal by the Office of Personnel

Management (“OPM”) to waive repayment of the duplicate disability benefits that

Friedman received. We affirm.

                                  BACKGROUND

      Friedman received disability retirement benefits from both the Federal

Employees Retirement System (“FERS”) and the Social Security Administration (“SSA”)

for the period of September 1, 2000, to August 30, 2002. It is undisputed that an

individual may not receive payment of full benefits from both the FERS and the SSA

concurrently. 5 U.S.C. § 8452(a)(2) (2000). Consequently, OPM—which administers
FERS payments—determined that Friedman was required to repay the overpaid

benefits amounting to $22,260.00. OPM imposed a repayment schedule of $125.00 per

month for 178 months, to be withheld from Friedman’s monthly retirement benefit.

OPM’s determination was affirmed by the administrative judge (“AJ”), except that the

repayment schedule was modified to require payment only at the rate of $75.00 per

month. The full Board denied review of the AJ’s decision. Friedman timely appealed

the Board’s decision to this Court.     We have jurisdiction pursuant to 28 U.S.C. §

1295(a)(9) (2000).

                                      DISCUSSION

       Friedman maintains that the Board’s affirmance is flawed because:          (1) his

mental state should be a basis for waiving the repayment altogether; and alternatively,

(2) his repayment should be reduced by the amount of attorney’s fees he incurred when

applying for disability benefits from the SSA; and (3) his repayment schedule should be

reduced to $5 per month due to his financial circumstances.

       We must affirm the Board’s decision unless it is found to be 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); Butterbaugh v. Dep’t of Justice, 1336 F.3d 1332, 1336 (Fed.

Cir. 2003).

                                            I

       Waiver of a repayment is available when, “in the judgment of the [OPM], the

individual is without fault and recovery would be against equity and good conscience.” 5

U.S.C. § 8470(b) (2000).      In accordance with our conclusion regarding identical

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language in the Civil Service Retirement Act, this provision grants OPM discretion to

determine whether to waive a repayment. See Grabis v. Office of Pers. Mgmt., No. 04-

3239, slip op. at 9 (Fed. Cir. Sept. 27, 2005) (construing 5 U.S.C. § 8436(b) (2000)).

OPM’s “set-aside rule” requires that when an individual is aware that he has received an

overpayment, he is obligated under principles of equity and good conscience to set

aside the amount overpaid for repayment to the OPM. OPM Policy Guidelines on the

Disposition of Overpayments § I.C.4. When an individual fails to set aside the overpaid

amount, he cannot—absent a showing of exceptional circumstances—claim that it is

against equity and good conscience for OPM to recover the repayment. Id.

       OPM informed Friedman of its “set-aside” requirement when it initially approved

his application for benefits. In its approval letter, OPM stated that “Social Security

checks should not be negotiated until the FERS benefit has been reduced. The Social

Security checks will be needed to pay OPM for the reduction which should have been

made in the FERS annuity.” J.A. at 48. Friedman nonetheless failed to set aside the

amount he was overpaid. Before the Board, Friedman argued that his mental state was

an exceptional circumstance requiring the waiver of repayment because he suffered

from   severe   mental   problems    including   stress,   problems   with   interpersonal

relationships, and depression. Friedman’s doctor testified that Friedman experienced

anxiety and depression. However, the doctor also testified that in general Friedman

could tend to the normal affairs of living, maintaining a home, and conducting

household-related business. The Board determined that Friedman’s mental problems

were not so severe as to constitute an exceptional circumstance justifying a waiver. We

conclude that that finding is supported by substantial evidence.

05-3068                                 3
                                            II

      Friedman also argues that OPM should deduct from his repayment amount the

attorney’s fees he incurred for pursuing disability benefits from the SSA, because

Friedman was required, as a recipient of FERS benefits, to apply for SSA benefits. The

AJ denied this request, noting that “[t]here is no provision in the statute [5 U.S.C. §

8470] for a reduction in the overpaid amount for any attorney fees incurred in obtaining

SSA benefits.”    J.A. at 8 n.1.   Friedman claims that the attorney’s fees should be

deducted as a matter of “equity and good conscience” because he was required to

pursue the SSA benefits. Although Friedman was required to apply for SSA benefits,

he was not required to obtain counsel to do so. Friedman does not explain why the

payment of attorney’s fees constitutes an “exceptional circumstance” justifying a partial

waiver. We find no error in the Board’s refusal to reduce the repayment amount by

Friedman’s attorney’s fees.

                                            III

      Finally, Friedman argues that his repayment should have been reduced to $5 per

month. When an individual is not entitled to a waiver, he may still be entitled to an

adjustment of his repayment schedule if he shows financial hardship.         5 C.F.R. §

845.301 (2005).    The AJ found that after Friedman’s fixed monthly expenses are

deducted from his monthly income, he is left with $380.00 for non-fixed living expenses

consisting of food, gasoline, and emergency expenses, and that he “requires

substantially all of his income to meet ordinary and necessary living expenses.” J.A. at

10. After conducting a review of Friedman’s expenses, the AJ decided to modify OPM’s

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repayment schedule of $125 per month to $75 per month to ensure that Friedman has

enough remaining for non-fixed monthly expenses. Friedman has provided no basis on

which to disturb the Board’s decision not to further reduce his repayment obligation.

                                     CONCLUSION

      For the foregoing reasons, the Board’s decision is affirmed.

                                        COSTS:

      No costs.

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