Court Opinion

ID: 2800773
Source: CourtListenerOpinion
Date Created: 2015-05-14 15:01:56.870437+00
Date Added: 2024-06-11T12:45:04.869109
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

               SIDNEY NELSON, JR.,
                    Petitioner

                           v.

    OFFICE OF PERSONNEL MANAGEMENT,
                  Respondent
            ______________________

                      2014-3191
                ______________________

   Petition for review of the Merit Systems Protection
Board in No. SF-0845-13-0347-I-1.
                ______________________

                 Decided: May 14, 2015
                ______________________

   SIDNEY NELSON, JR., Seattle, WA, pro se.

    ALBERT S. IAROSSI, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, for respondent. Also represented by
SHELLEY D. WEGER, BENJAMIN C. MIZER, ROBERT E.
KIRSCHMAN, JR., REGINALD T. BLADES, JR.
                ______________________

     Before MOORE, CLEVENGER, and WALLACH, Circuit
                      Judges.
2                                             NELSON   v. OPM

PER CURIAM.
     Petitioner Sidney Nelson, Jr., appeals the final order
of the Merit Systems Protection Board (“Board”) affirming
the Office of Personnel Management’s (“OPM”) finding
that Mr. Nelson owed $36,505.58 in overpaid annuity
payments from the Federal Employees Retirement Sys-
tem (“FERS”). See Nelson v. Office of Pers. Mgmt., No.
SF-0845-13-0347-I-1 (Merit Sys. Prot. Bd. Aug. 15, 2014)
(Resp’t’s App. 44–50) (“Final Order”); Nelson v. Office of
Pers. Mgmt., No. SF-0845-13-0347-I-1 (Merit Sys. Prot.
Bd. Dec. 5, 2013) (Resp’t’s App. 22–37) (“Initial Decision”).
Because the Board’s findings were supported by substan-
tial evidence, this court affirms.
                       BACKGROUND
     Mr. Nelson, a former mail handler with the United
States Postal Service, was approved for FERS disability
retirement benefits effective July 19, 2000. In order to
continue receiving these benefits, he was limited to earn-
ing less than $31,937.60, which was 80% of his base pay
at retirement of $39,922. In other words, if he were to
earn $31,937.60 or more, he would be ineligible for disa-
bility retirement benefits. OPM eventually discovered
that while Mr. Nelson was receiving disability retirement
payments, his earnings exceeded the 80% limitation in
calendar years 2001, 2005, 2006, and 2007.
    On February 1, 2006, OPM informed Mr. Nelson he
had been overpaid $3,225.38 from July 1, 2002, through
January 31, 2006. OPM stated the cause of the overpay-
ment was Mr. Nelson’s receipt of disability payments
despite the fact he was ineligible to receive them. On
February 8, 2006, Mr. Nelson responded that he could not
afford to repay the overpayment.
    On March 21, 2009, OPM notified Mr. Nelson that the
determined overpayment amount was revised to
$36,505.58. It stated he was not entitled to payments
NELSON   v. OPM                                              3

received from July 1, 2002, through December 31, 2002,
and from July 1, 2006, through December 31, 2008, be-
cause his earnings exceeded the 80% earnings threshold
in calendar years 2001, 2005, 2006, and 2007. The notice
explained the overpayment would be recovered through
seventy-three monthly installments of $500 and a final
installment of $5.58. Mr. Nelson requested that OPM
waive the overpayment, claiming he had no knowledge of
the overpayment and he should not be held responsible
for OPM’s mistake.
    On May 25, 2011, in a reconsideration decision, OPM
denied his request. Mr. Nelson appealed to the Board.
OPM subsequently rescinded its May 2011 reconsidera-
tion decision and issued a new decision in February 2013,
denying Mr. Nelson’s request for waiver. OPM found Mr.
Nelson was partially at fault for creating the overpay-
ment. In addition, even though OPM found Mr. Nelson
had not provided enough evidence to demonstrate finan-
cial hardship, it revised the repayment schedule so the
overpayment would be repaid in 243 monthly payments of
$150 and a final payment of $55.58.
     Mr. Nelson appealed OPM’s decision to the Board, ar-
guing he was without fault for the overpayment and
repaying it would cause hardship. On December 5, 2013,
an Administrative Judge issued the Initial Decision
affirming the OPM’s decision. Mr. Nelson subsequently
filed a petition for review to the full Board. On August
15, 2014, the Board affirmed the Initial Decision in its
Final Order.
    Mr. Nelson appeals the Final Order. This court has
jurisdiction pursuant to 28 U.S.C. § 1295(a)(9) (2012).
                         DISCUSSION
                   I. Standard of Review
    This court’s “scope of . . . review of [B]oard decisions is
limited to whether they are (1) arbitrary, capricious, an
4                                            NELSON   v. OPM

abuse of discretion, or otherwise not in accordance with
law; (2) obtained without procedures required by law,
rule, or regulation having been followed; or (3) unsupport-
ed by substantial evidence.” Forest v. Merit Sys. Prot. Bd.,
47 F.3d 409, 410 (Fed. Cir. 1995) (citing 5 U.S.C. § 7703(c)
(1988)). The issue of Board jurisdiction is a question of
law this court reviews de novo. Johnston v. Merit Sys.
Prot. Bd., 518 F.3d 905, 909 (Fed. Cir. 2008). This court is
bound by the Board’s jurisdictional factual findings “un-
less those findings are not supported by substantial
evidence.” Bolton v. Merit Sys. Prot. Bd., 154 F.3d 1313,
1316 (Fed. Cir. 1998).
    II. Disability Benefit Earnings Cap and Overpayment
    Any person receiving retirement disability annuities
under the age of sixty who receives income or wages in
any calendar year “equal[ to] or greater than at least 80
percent of the current rate of basic pay of the position
occupied immediately before retirement” is considered to
have his or her earning capacity restored. 5 C.F.R.
§ 844.402(a). If earning capacity is considered restored,
the retirement disability annuity “will terminate on the
June 30 after the end of the calendar year in which earn-
ing capacity is restored.” Id.
    Recipients of retirement disability annuities “must
report to OPM their income from wages or self-
employment or both for that calendar year. . . . If an
annuitant fails to submit the report, OPM may stop
annuity payments until it receives the report.” Id.
§ 844.402(d).
    Once OPM has demonstrated to the Board by a pre-
ponderance of evidence that the overpayment occurred,
the burden shifts to Mr. Nelson to “establish by substan-
tial evidence that he . . . is eligible for a waiver or an
adjustment.” Id. § 831.1407(b).
NELSON   v. OPM                                             5

    OPM may recover an overpayment from a recipient
who is not eligible for waiver. See id. § 831.1401. A
recipient is eligible for waiver if (a) he or she is “without
fault” and (b) “recovery would be against equity and good
conscience.” Id. § 845.301. One who receives an “over-
payment is without fault if he or she performed no act of
commission or omission that resulted in the overpayment.
The fact that the [] OPM or another agency may have
been at fault in initiating an overpayment will not neces-
sarily relieve the individual from liability.” Id. § 845.302.
OPM is required to consider certain factors when deter-
mining fault:
    (1) Whether payment resulted from the individu-
    al’s incorrect but not necessarily fraudulent
    statement, which he or she should have known to
    be incorrect;
    (2) Whether payment resulted from the individu-
    al’s failure to disclose material facts in his or her
    possession, which he or she should have known to
    be material; or
    (3) Whether he or she accepted a payment that he
    or she knew or should have known to be errone-
    ous.
Id. § 845.302(a). “The individual’s age, physical and
mental condition or the nature of the information sup-
plied to him or her by OPM or a Federal agency may
mitigate against finding fault.” Id. § 845.302(b).
     Even if Mr. Nelson “is ineligible for waiver,” he may
still be “entitled to an adjustment in the recovery sched-
ule if he [] shows that it would cause him [] financial
hardship to make payment at the rate scheduled.” Id. §
845.301. “Financial hardship may be deemed to exist in—
but not limited to—those situations where the annuitant
from whom collection is sought needs substantially all of
his/her current income and liquid assets to meet current
6                                           NELSON   v. OPM

ordinary and necessary living expenses and liabilities.”
Id. § 831.1404.
    OPM may take into account certain factors when de-
termining whether recovery would cause financial hard-
ship: “(1) The individual’s financial ability to pay at the
time collection is scheduled to be made. (2) Income to
other family member(s), if such member’s ordinary and
necessary living expenses are included in expenses re-
ported by the annuitant.” Id. § 831.1404(a).

     III. The Board’s Finding that Mr. Nelson Was Not
    Without Fault for the Overpayment Was Supported by
                    Substantial Evidence
    Mr. Nelson’s entitlement to a waiver is governed by
whether he was at fault for the overpayments. Mr. Nel-
son does not contest he received an overpayment, he does
not disagree with the overpayment amount, and he does
not contest he had notice of the 80% earnings limit. In his
petition for appeal to the Board, he argued only that he
was not at fault for the overpayments.
    The Board’s finding that Mr. Nelson was not without
fault was supported by substantial evidence. Thus, it was
within its discretion to deny Mr. Nelson’s waiver request.
See 5 C.F.R. § 831.1407(b). The record shows Mr. Nelson
received a letter dated April 4, 2005, outlining his 80%
earnings limitation and his responsibility to report his
earnings to OPM. As the Board found, Mr. Nelson “was
put on further notice concerning the 80% limitation upon
his receipt of the agency’s February 1, 2006 notice of
overpayment” and he chose not to report his 2007 earn-
ings. Initial Decision at 7 n.5. Mr. Nelson accepted
retirement benefit payments when he knew or should
have known he was ineligible to receive such benefits.
See 5 C.F.R. § 845.302(a)(3). By not reporting his earn-
ings, and by not setting aside known ineligible payments,
Mr. Nelson performed several acts of “omission that
NELSON   v. OPM                                            7

resulted in overpayment.” Id. § 845.302. The overpay-
ment was a result of Mr. Nelson’s “failure to disclose
material facts in his [] possession,” mainly, his salary
amount and the fact that his salary exceeded the 80%
limit. Id. § 845.302(a)(2).
   IV. The Board’s Finding that Mr. Nelson Was Not
Entitled to Further Adjustment of the Recovery Schedule
        Was Supported by Substantial Evidence
    Mr. Nelson is eligible for an adjustment of his pay-
ment schedule if he can show the current recovery sched-
ule would cause “financial hardship.” Id. § 845.1404.
The Board’s finding that Mr. Nelson “failed to show that
he is entitled to any adjustment on the collection sched-
ule,” Initial Decision at 10, was supported by substantial
evidence.
    As the Board found, Mr. Nelson failed to show he
would face financial hardship because he did not provide
substantial evidence to establish his current income. This
made it impossible to determine whether he “needs sub-
stantially all of his[] current income and liquid assets to
meet current ordinary and necessary living expenses and
liabilities,” 5 C.F.R. § 831.1404, or to determine his “fi-
nancial ability to pay at the time collection is scheduled to
be made,” id. § 831.1404(a)(1).
    Although Mr. Nelson did not file a required “Financial
Resources Questionnaire,” he provided an unsworn
statement stating he was living on social security and
disability payments, and listed several of his expenses.
Initial Decision at 7. The statement did not list his or his
spouse’s specific incomes.
    OPM substantially revised Mr. Nelson’s payment
schedule in February 2013. Mr. Nelson failed to provide
sufficient evidence asserting he is entitled to further
schedule adjustments.
8                                        NELSON   v. OPM

                     CONCLUSION
   For the reasons set forth above, the decision by the
Board is
                     AFFIRMED
                        COSTS
    No costs.