Court Opinion

ID: 9400651
Source: CourtListenerOpinion
Date Created: 2023-06-08 19:00:16.712839+00
Date Added: 2024-06-11T17:19:47.003826
License: Public Domain

UNITED STATES OF AMERICA
                        MERIT SYSTEMS PROTECTION BOARD

     BUDEIA V. BASS,                                 DOCKET NUMBER
                   Appellant,                        NY-0845-17-0098-I-1

                  v.

     OFFICE OF PERSONNEL                             DATE: June 8, 2023
       MANAGEMENT,
                   Agency.

                  THIS ORDER IS NONPRECEDENTIAL 1

           Budeia V. Bass, New York, New York, pro se.

           Carla Robinson, Washington, D.C., for the agency.

                                           BEFORE

                               Cathy A. Harris, Vice Chairman
                                Raymond A. Limon, Member

                                     REMAND ORDER

¶1         The appellant has filed a petition for review of the i nitial decision, which
     affirmed the final decision of the Office of Personnel Management (OPM) finding
     that she had been overpaid in disability retirement benefits and that collection of
     the overpayment would not be waived. Generally, we grant petitions such as this

     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        A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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

     one only in the following circumstances: the initial decision contains erroneous
     findings of material fact; the initial decision is based 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. 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. We AFFIRM the initial
     decision as to the existence and amount of the overpayment and the waiver issue .
     However, for the reasons discussed below, we REMAND the case to the field
     office for further adjudication concerning the collection schedule.

                                      BACKGROUND
¶2         On February 2, 2017, OPM issued a final decision notifying the appellant
     that she had received a Federal Employees’ Retirement System (FERS) disability
     retirement annuity overpayment, which OPM intended to collect.          IAF, Tab 7
     at 9-12. Specifically, OPM found that the appellant began receiving her FERS
     disability retirement annuity effective August 16, 2007, and became entitled to
     Social Security Disability Insurance benefits effective December 1, 2007 , on
     which date the FERS annuity should have been reduced by a statutorily required
     amount.    Id. at 9.   However, OPM did not reduce the FERS annuity until
     September 1, 2013, and as a result, it had overpaid the appellant a total of
     $67,425.00 in FERS disability retirement annuity. Id. at 9-10. OPM notified the
     appellant that it intended to collect the overpayment in 71 monthly installments of
     $142.99 and a final installment of $76.71. Id. at 12.
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¶3         The appellant appealed OPM’s final decision to the Board, alleging that she
     did not know that she was receiving an overpayment and seeking a waiver of
     recovery based on OPM’s 81-month delay in reducing her annuity. IAF, Tabs 1,
     5. She waived her right to a hearing. IAF, Tab 1 at 1.
¶4         After the record closed, the administrative judge issued an initial decision
     affirming OPM’s final decision. IAF, Tab 10, Initial Decision (ID). She found
     that OPM proved the existence and amount of the overpayment and that the
     appellant did not prove entitlement to waiver of recovery of the debt. ID at 3-5.
     She further found that OPM notified the appellant of her obligation to set aside
     any monies received from the Social Security Administration.        ID at 4.     The
     administrative judge also found that, while the appellant’s medical conditions
     rendered her incapable of continuing in the workforce, the appellant did not
     demonstrate that her medical conditions were so severe that she was unable to
     understand OPM’s guidance. Id. Therefore, the appellant knew or should have
     known that she was receiving erroneous payments from OPM and that she was
     obligated to return that money to OPM.       Id.   Thus, the administrative judge
     concluded that the appellant should have set aside the Social Security payments
     and she was not eligible for waiver of collection of the overpayment. ID at 5.
¶5         The appellant has petitioned for review, asserting that the administrative
     judge erred in finding that she did not challenge the amount of the overpayment.
     Petition for Review (PFR) File, Tab 1 at 1.          She also contends that the
     administrative judge improperly found that she notified OPM that she received
     Social Security benefits.   Id.   Additionally, the appellant contends that her
     medical documentation was disregarded.      Id.    OPM has not responded to the
     petition.

                                        ANALYSIS
¶6         OPM bears the burden of proving by preponderant evidence the existence
     and amount of an annuity overpayment.              Vojas v. Office of Personnel
                                                                                            4

     Management, 115 M.S.P.R. 502, ¶ 10 (2011); 5 C.F.R. §§ 845.307(a),
     1201.56(b)(1)(ii). We agree with the administrative judge that OP M satisfied its
     burden in this case.      ID at 3.      As noted, the appellant asserts that the
     administrative judge erred in finding that she did not challenge the amount of the
     overpayment; according to the appellant, she did so by requesting her disability
     retirement record.    PFR File, Tab 1.           However, regardless of whether the
     appellant was attempting to challenge the amount of the overpayment, the
     disability retirement record that the appellant was seeking was submitted by OPM
     and is part of the record in this appeal. IAF, Tab 7 at 26-33. The appellant has
     not demonstrated any error in that disability retirement record.
¶7         Recovery of an overpayment in FERS disability retirement benefits will be
     waived when the annuitant is without fault and recovery would be a gainst equity
     and good conscience. 5 U.S.C. § 8470(b); 5 C.F.R. § 845.301; see Spinella v.
     Office of Personnel Management, 109 M.S.P.R. 185, ¶ 6 (2008).                Generally,
     recovery is against equity and good conscience when it would cause financial
     hardship, the annuitant can show that because of the overpayment she
     relinquished a valuable right or changed positions for the worse, or recovery
     could be unconscionable under the circumstances.             5 C.F.R. § 845.303; see
     Spinella, 109 M.S.P.R. 185, ¶ 6. The unconscionability standard is a high one
     and the Board will waive recovery of an annuity overpayment based on
     unconscionability under only exceptional circumstances. Spinella, 109 M.S.P.R.
     185, ¶ 7. In considering whether an appellant has established unconscionability,
     the   Board   will   consider   all   relevant    factors   under   a   “totality-of-the-
     circumstances” approach. Vojas, 115 M.S.P.R. 502, ¶ 22. Those circumstances
     may include, as relevant here, circumstances in which the annuitant’s personal
     limitations, including lack of education, physical or mental disability, or other
     factors that would make recovery of the payment manifestly unfair.              King v.
     Office of Personnel Management, 114 M.S.P.R. 181, ¶ 20 (2010).
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¶8         We agree with the administrative judge that the appellant did not prove that
      she has such personal limitations that would make recovery of the overpayment
      manifestly unfair. ID at 4. Contrary to the appellant’s contention in her petition
      for review, the administrative judge considered her medical conditions. Id.; PFR
      File, Tab 1. We agree with the administrative judge that, although the appellant’s
      medical conditions rendered her incapable of continuing in the workforce, the
      evidence does not show that that her physical or mental conditions were so severe
      that she was unable to understand OPM’s guidance.          Thus, the appellant’s
      conditions do not provide a basis to waive collection of the overpayment. ID at 4.
      The administrative judge’s failure to specifically mention all of the medical
      evidence of record does not mean that she did not consider it in reaching her
      decision.   See Marques v. Department of Health and Human Services,
      22 M.S.P.R. 129, 132 (1984), aff’d, 776 F.2d 1062 (Fed. Cir. 1985) (Table).
¶9         OPM’s Policy Guidelines provide that individuals who know or suspect that
      they are receiving overpayments are expected to set aside the amount overpaid
      pending recoupment, and that, absent exceptional circumstances , recovery in
      these cases is not against equity and good conscience.     IAF, Tab 7 at 80, 91
      (Policy Guidelines of the Disposition of Overpayments under the Civil Service
      Retirement System and Federal Employees’ Retirement System § I.C.4); see
      Wright v. Office of Personnel Management, 105 M.S.P.R. 419, ¶ 4 (2007). This is
      known as the “set aside rule.”
¶10        We agree with the administrative judge that the appellant in this case was
      subject to the set aside rule, and that OPM notified her of the obligation to set
      aside monies received from the Social Security Administration that constituted
      duplicate payments. ID at 4; IAF, Tab 7 at 46. Additionally, OPM submitted a
      copy of the Social Security Administration’s notice to the appellant that she was
      entitled to a monthly disability benefit. IAF, Tab 7 at 39. It appears that the
      appellant submitted this notice to OPM and her assertion in her petition for
      review that she did not notify OPM that she had received Social Security
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      disability benefits is unavailing.    Id. at 38.   In sum, the administrative judge
      properly found that the appellant was subject to the set aside rule and thus, she
      was not entitled to waiver of collection of the overpayment.
¶11            Nevertheless, an annuitant who is ineligible for waiver of recovery of an
      overpayment may be entitled to an adjustment in the recovery schedule if she
      shows, based on the information submitted on OPM’s Financial Resources
      Questionnaire (FRQ), that the collection schedule would cause her financial
      hardship. Malone v. Office of Personnel Management, 113 M.S.P.R. 104, ¶ 4
      (2010); 5 C.F.R. § 845.301. Although this pro se appellant has not explicitly
      contested the repayment schedule on petition for review, in her final submission
      below, received after the record closed, she submitted a copy of an FRQ, dated
      October 25, 2016. IAF, Tab 12. 2 The appellant asserted that she had submitted
      the FRQ to OPM with her reconsideration request, but that OPM had failed to
      consider this information in formulating the collection schedule.           IAF, Tab 7
      at 12, Tab 12 at 7-15. The appellant included evidence that the FRQ had been
      sent to OPM by certified mail on October 26, 2016. IAF, Tab 12 at 15.
¶12            Based on the 2016 FRQ, it appears that the appellant may be unable to make
      repayments as scheduled by OPM without financial hardship. Considering her
      attempt to have OPM consider the FRQ and then, albeit in an untimely
      submission, to provide it below, we find it appropriate to consider whether an
      adjustment of the recovery schedule is warranted. Because more than 6 years
      have passed since the appellant completed the FRQ, it is likely that her financial
      situation has changed, and she should be afforded an opportunity to file additional
      evidence and argument addressing the issue, including an updated FRQ. Thus,
      we remand this appeal to the administrative judge for further adjudication o f this
      issue.

      2
        The appellant’s final filing was received in the New York Field Office on May 26,
      2017, one day after the administrative judge issued the initial decision and 4 days after
      the date the record closed. IAF, Tab 12.
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¶13         As explained above, the existence and the amount of the overpayment are
      not at issue. Nor is the appellant entitled to a waiver of the collection. The sole
      issue for adjudication on remand will be the collection schedule. 3

                                              ORDER
¶14         For the reasons discussed above, we remand this case to the New York Field
      Office for further adjudication in accordance with this Remand Order.

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

      3
        The appellant is notified that OPM has advised the Board that it may seek recovery
      from an annuitant’s estate or other responsible party of any debt remaining upon his or
      her death. A party responsible for any debt remaining upon an a nnuitant’s death may
      include an heir (spouse, child, or other) who derives a benefit from the annuitant’s
      Federal benefits, an heir or other person acting as the representative of his or her estate
      if, for example, the representative fails to pay the United States before paying the
      claims of other creditors in accordance with 31 U.S.C. § 3713(b), or transferees or
      distribute[r]s of the annuitant’s estate. Pierotti v. Office of Personnel Management,
      124 M.S.P.R. 103, ¶ 13 (2016).