Court Opinion

ID: 2805904
Source: CourtListenerOpinion
Date Created: 2015-06-05 15:02:02.119812+00
Date Added: 2024-06-11T12:05:30.263740
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

                CAMBRA L. LUCAS,
                    Petitioner

                           v.

    OFFICE OF PERSONNEL MANAGEMENT,
                  Respondent
            ______________________

                      2014-3158
                ______________________

   Petition for review of the Merit Systems Protection
Board in No. SF-0845-13-0413-I-1.
                ______________________

                 Decided: June 5, 2015
                ______________________

   CAMBRA L. LUCAS, Ripon, CA, pro se.

    ERIC LAUFGRABEN, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, for respondent. Also represented by
JOYCE R. BRANDA, ROBERT E. KIRSCHMAN, JR., DEBORAH A.
BYNUM.
                ______________________

    Before REYNA, PLAGER, and TARANTO, Circuit Judges.
2                                           LUCAS   v. OPM

PER CURIAM.
    Cambria Lucas appeals from the final order of the
Merit Systems Protection Board (“Board”) affirming that
she was not entitled to a waiver of her repayment
obligation arising out of overpayment of post-retirement
annuity benefits. Because the Board failed to consider
new and material evidence in denying Lucas’ petition, we
vacate and remand for limited further proceedings.
                    I. BACKGROUND
      A. Lucas’ Retirement And Disability Benefits
    Lucas was employed by the Federal Government
between 1985 and 2007. In late 2006, Lucas applied for
disability retirement benefits under the Federal
Employees Retirement System (FERS) and for disability
benefits through the Social Security Administration
(SSA). FERS benefits take the form of a monthly annuity
payment. The Office of Personnel Management (“OPM”),
the agency that administers FERS annuity benefits,
requires applicants to notify OPM as soon as they are
awarded SSA benefits in order to reduce the annuity by
the entire SSA benefit amount for the first 12 months and
by a smaller amount thereafter.
    On March 26, 2007, OPM sent Lucas a letter notifying
her that her application for FERS disability benefits had
been approved. Resp’t’s App. 95. FERS annuity benefits
are usually approved before SSA benefits and are reduced
after the annuitant receives SSA benefits. OPM’s letter
explained that the initial payments made by OPM would
be “interim payments” until OPM was able to finally
calculate the precise amount of her benefits once the SSA
benefit amount was determined. The letter advised Lucas
that the interim payment was “usually about 80 percent
of the amount of your actual annuity payment.” Id. The
letter also informed Lucas that she was required to apply
LUCAS   v. OPM                                          3

for SSA benefits and to immediately inform OPM of her
SSA approval. Id.
    On March 27, 2007, Lucas was approved for SSA
benefits in the amount of $1,755.00 per month. Id. at 93.
Lucas claims that she notified OPM that she had been
approved for SSA benefits but acknowledges she has no
proof of that notification. See Pet’r’s App. 27.
    On April 19, 2007, OPM sent Lucas a statement that
set out the amount of her interim benefits, less Federal
Income Tax, for the period of February 3, 2007 through
March 30, 2007.       Below the statement of benefits,
boilerplate language explained that the government was
paying interim benefits “until we [OPM] can determine
the exact amount to which you are entitled” once Lucas’
SSA benefits were determined. Resp’t’s App. 89. The
boilerplate explained that interim payments were being
made “at a rate that should be less than [Lucas’] actual
earned annuity.” Id. OPM used the lower rate so as “to
avoid an overpayment which would have to be received
from [Lucas’] future annuity payments.” Id. In the event
of overpayment, Lucas would be notified and have an
opportunity to respond before OPM would start
“withhold[ing] the excess from future annuity payments.”
Id. The letter also informed Lucas that her health
benefits and life insurance coverage would continue
without interruption, but that those deductions would not
be itemized in the interim payment statements. Id. at 90.
                 B. Overpayment Of Benefits
     Although Lucas claims to have notified OPM of her
approval for SSA benefits, OPM did not reduce Lucas’
annuity benefits. As such, Lucas continued to receive
benefits at the same rate as her interim award amount for
over three years. Id. at 84. During that time, Lucas
repeatedly contacted OPM to discuss the amount of her
annuity benefits, concerned that she was not receiving the
full amount to which she was entitled. Pet’r’s App. 60.
4                                            LUCAS   v. OPM

    After reviewing Lucas’ file in 2010, the government
determined that Lucas was being overpaid. Because the
government had not deducted the SSA amount or the
premiums for Lucas’ health benefits and life insurance
from her annuity benefits, Lucas had received an excess of
$89,675. Resp’t’s App. 85. On July 20, 2010, the
government sent Lucas a notice of amount due because of
overpayment. Id. In the notice, the government proposed
that Lucas repay the overpayments by making 303
monthly payments of slightly less than $300. Id. The
notice informed Lucas that she could accept the
government’s offer or counter with a lesser compromise
amount. Id. at 84.
                  C. Procedural History
     Lucas rejected the government’s offer and requested
that OPM reconsider its determination of the amount of
excess payments.        She also sought waiver for
overpayment on the basis she was not at fault, that she
detrimentally relied on the agency’s overpayment, and
that recovery would be unconscionable under the
circumstances. In April 2013, OPM issued a decision
affirming the overpayment, though adjusting the amount
to $89,636. Id. at 75. Regarding Lucas’ waiver argument,
OPM determined that, while Lucas was not at fault for
the overpayment, she had not established either that she
detrimentally relied on the overpayment or that recovery
would be unconscionable. Id. at 77. Thus, OPM denied
Lucas’ request for waiver.
    Lucas appealed to the Board. The administrative
judge held a hearing in the case on June 14, 2013, and
closed the record at the end of the hearing. Id. at 35. The
administrative judge issued an initial decision affirming
both that OPM had established the correct amount of
overpayment, id., and that Lucas had not detrimentally
relied on OPM’s overpayment, id. at 42. Regarding
unconscionability, the administrative judge found that
LUCAS   v. OPM                                             5

Lucas presented no evidence that OPM had learned that
Lucas was receiving SSA benefits, for instance through its
routine checks of the SSA’s computer systems, “until
shortly before it finalized its calculations” in 2010. Id. at
42. Though the administrative judge acknowledged that
it was “troubling that it took OPM so long to find and
correct any of the mistakes with [Lucas’] annuity,” the
judge found OPM’s conduct did not rise to the level of
unconscionability. Id. at 43.
     On August 1, 2013, Lucas filed a petition for review of
the Board’s initial decision. On August 26, 2013, OPM
filed its response and attached a document that it claimed
it had inadvertently omitted from the agency appeal file.
Id. at 57.       The document was a Social Security
Administration printout, entitled “SSA Response Screen,”
from October 2008, indicating that Lucas was entitled to
SSA benefits and that she had received payments in 2007.
Id. at 58. Lucas responded, arguing that the SSA
Response Screen document demonstrated that OPM had
knowledge of the overpayment in 2008.
    In May 2014, the Board affirmed the initial decision
in a final decision, finding that Lucas again did not
present     sufficient    evidence     to    demonstrate
unconscionability or detrimental reliance. During review
proceedings, Lucas cited an additional SSA printout for
an individual OPM had mistaken for Lucas, arguing the
printout circumstantially demonstrated OPM error in
processing her alleged notification of benefits. Resp’t’s
App. 4. Because Lucas had not cited this discrepancy as
evidence in any earlier proceeding, the Board held that
the mistaken SSA printout was neither new nor material.
Id. at 5. The Board did not reference the October 2008
SSA Response Screen document in its opinion.
    Lucas appeals the Board’s denial of her petition for
review.      We have jurisdiction under 28 U.S.C.
§ 1295(a)(9).
6                                            LUCAS   v. OPM

               II. New Material Evidence
    The Board may grant a petition for review if the
petitioner presents new and material evidence “that,
despite due diligence, was not available when the record
closed.” Azarkish v. Office of Pers. Mgmt., 915 F.2d 675,
679 (Fed. Cir. 1990) (quoting 5 C.F.R. § 1201.115(d)).
New evidence is evidence that first becomes available
after the record closes. 5 C.F.R. § 1201.115(d). Evidence
is material if it “is of sufficient weight to warrant an
outcome different from that of the initial decision.”
Wright v. U.S. Postal Serv., 183 F.3d 1328, 1332 (Fed. Cir.
1999) (quotation marks and citation omitted).
    Lucas argues that she presented new and material
evidence which went unconsidered by the Board. Lucas
points to the SSA Response Screen document that was not
produced by OPM until after Lucas filed her petition for
review with the Board. Pet’r’s Br. 2–3. Lucas argues that
OPM’s failure to turn the document over to either the
administrative judge or to her contravened an order from
the administrative judge. Id. at 9. That response screen
document, dated September 10, 2008, contains details
related to Lucas’ SSA payment history in 2007.
Specifically, it shows that Lucas received SSA payments
on May 1, 2007 and December 1, 2007. Pet’r’s App. 26.
Lucas contends that this document establishes that OPM
was able to “view” the benefits she was receiving from
SSA as early as 2008. Pet’r’s Br. 3. She argues that
because OPM had this information in 2008 and did not
act on it until 2010, she is entitled to waiver of the
obligation to repay the overpayment.
    OPM concedes that the Board did not consider Lucas’
SSA Response Screen document in its decision denying
Lucas’ petition for review. Resp’t’s Br. 12. But because it
was in the record when the Board issued its final decision,
OPM argues, we must presume that the Board considered
it and found it to not be material. Id. at 13. OPM points
LUCAS   v. OPM                                            7

out that Lucas did not cite evidence that the Board did
not consider Lucas’ Response Screen document. Id. The
government contends that the Response Screen document
does not establish that OPM discovered Lucas’
overpayments before July 2010, or that OPM delayed in
responding to the overpayment after becoming aware of
it. Id.
    We find that Lucas’ SSA Response Screen document
constitutes new and material evidence. OPM admitted
that the document was inadvertently “omitted from the
agency appeal file” submitted to the regional Board.
Resp’t’s App. 31. OPM further acknowledged that “the
administrative judge and the appellant were not made
aware of the document.” Id. As such, the SSA Response
Screen document was not available to Lucas until after
she filed her petition for review, well after the
administrative judge rendered the initial decision and the
close of the record on June 14, 2013.
    OPM was required by 5 C.F.R. § 1201.25 to produce
all documents contained in the agency’s record of the
action. The government acknowledged it produced these
documents minus Lucas’ SSA Response Screen document.
Id. at 25. Because Lucas had no knowledge that OPM
was in possession of this critical document, or that it even
existed, she could not have obtained the document prior to
the close of the record by exercising due diligence.
Accordingly, Lucas’ SSA Response Screen document is
new evidence.
    The SSA Response Screen document shows that Lucas
was receiving SSA benefits in 2007. In her informal reply
brief, filed after OPM moved to admit the document,
Lucas contended that the document’s date, October 16,
2008, demonstrated that OPM had notice of her receipt of
SSA benefits in 2008. Pet’r’s App. 9. It appears that
OPM did not respond to this argument, effectively
conceding it to Lucas. Taken as true, Lucas’ assertion
8                                             LUCAS   v. OPM

that OPM was on notice of her receipt of SSA benefits in
2008 could warrant a different outcome in her case.
    In denying Lucas’ petition for review, the Board made
no mention of the late-submitted document. Yet, the
Board found that OPM’s expeditious adjustment of Lucas’
annuity was a factor weighing against a finding that
repayment under the circumstances would be
unconscionable. 1 Resp’t’s App. 6. The Board relied on
two cases to support its expediency finding, Spinella v.
Office of Personnel Management, 109 M.S.P.R. 185 (2008)
and Taylor v. Office of Personnel Management, 87
M.S.P.R. 214 (2000), in which long delays before
adjustment of the annuity were not unconscionable
because the agency acted promptly after discovering the
overpayment. Id. If Lucas’ assertion that the Board had
notice of her receipt of SSA benefits since 2008 is correct,
then OPM’s adjustment of her benefits was not
expeditious. This undermines one basis for the Board’s
conclusion that the delay was not unconscionable. As
such, Lucas’ SSA Response Screen document is also
material evidence.
                       CONCLUSION
    We have considered Lucas’ other arguments and find
them without merit. We vacate the Board’s denial of
Lucas’ petition for review and remand for proceedings
limited to the Board’s consideration of whether new and
material evidence in the form of Lucas’ SSA Response
Screen document would render recovery unconscionable
under the circumstances.

    1  The Board determines whether recovery would be
unconscionable by evaluating the totality of the
circumstances, including whether “OPM failed to act
expeditiously to adjust an annuity in the face of specific
notice.” Simpson v. Office of Pers. Mgmt., 96 M.S.P.R. 52,
61 (2004).
LUCAS   v. OPM                          9

                 VACATED AND REMANDED
                         COSTS
   No costs.