Dachniwskyj v. Office of Personnel Management , 713 F.3d 99 ( 2013 )

United States Court of Appeals
for the Federal Circuit
______________________
ROKSOLIANA DACHNIWSKYJ,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent,
AND
THERESA DACHNIWSKYJ,
Intervenor.
______________________
2011-3158
______________________
Petition for review of the Merit Systems Protection
Board in No. CH0831100439-I-1.
______________________
Decided: April 2, 2013
______________________
JANICE L. BOBACK, Anderson & Boback, of Chicago, Il-
linois, argued for petitioner.
HILLARY A. STERN, Senior Trial Counsel, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for respond-
2 DACHNIWSKYJ v. OPM
ent. With her on the brief were STUART F. DELERY, Acting
Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
tor, and KIRK T. MANHARDT, Assistant Director.
DMYTRO KURYWCZAK, Oleksiuk & Associates, P.C., of
Palatine, Illinois, argued for intervenor.
______________________
Before LOURIE, PROST, and WALLACH, Circuit Judges.
WALLACH, Circuit Judge.
Roksoliana Dachniwskyj (“Roksoliana”) appeals the
April 19, 2011 final order of the Merit Systems Protection
Board (“Board”) affirming the initial decision of an Ad-
ministrative Judge who reversed the decision of the Office
of Personnel Management (“OPM”) and granted Theresa
Dachniwskyj (“Theresa”) survivor annuity benefits.
Dachniwskyj v. Office of Pers. Mgmt., CH-0831-10-0439-I-
1 (M.S.P.B. Apr. 19, 2011) (“Final Op.”). Because OPM’s
annual notice was insufficient to inform Myron
Dachniwskyj (“Myron”) of his rights and obligations with
respect to electing a spouse to receive a survivor’s annuity
within two years of divorce, and because the Board’s
award to Theresa was not supported by substantial
evidence, the decision is reversed.
BACKGROUND
Theresa was married to Myron at the time of his
retirement from the Federal Government on October 1,
1989. Myron elected to receive a reduced annuity during
his lifetime, and named Theresa to receive a survivor
annuity if he predeceased her.
On January 16, 1998, Myron and Theresa divorced.
Weeks later, Myron married Roksoliana. During the
years that followed, Myron received annual notices from
OPM explaining that “if he wanted to provide survivor
annuity benefits to a spouse that he married after retire-
ment, he had to send a signed request to OPM within 2
DACHNIWSKYJ v. OPM 3
years after the date of [his] marriage.” Final Op. at 4
(internal quotation marks and citation omitted); see App’x
57. Four years after marrying Roksoliana, Myron sent a
letter to OPM requesting survivor annuity benefits for
Roksoliana. OPM responded with two letters, both dated
June 29, 2002: The first letter denied Myron’s request
because it was not submitted within two years of his
marriage to Roksoliana. The second letter instructed
Myron to send a certified copy of his divorce decree in
order to change or eliminate the survivor election he
previously made.
Myron responded on January 25, 2006 with a written
request to change his survivor election stating: “Please,
remove name Theresa from the system and put in name
Roksoliana Dac[h]niwksyj, because [I have] been married
[to] her since January 31, 1998.” App’x 36. He also pro-
vided the divorce decree terminating his marriage to
Theresa and the marriage certificate documenting his
marriage to Roksoliana.
On March 27, 2006, OPM responded, asking Myron
for clarification of whether he wanted to transfer the full
survivor benefits from his former spouse to his current
spouse. Myron responded with another signed request to
transfer “the survivor benefits” to Roksoliana, his current
spouse. OPM sent Myron a written notification on April
13, 2006, indicating that his election to transfer full
survivor benefits from his former spouse to his new
spouse was effective immediately.
Myron died on August 11, 2009. Thereafter, Roksoli-
ana applied for survivor annuity benefits. OPM granted
her application and began paying her benefits.
Theresa also applied for survivor annuity benefits,
which OPM denied. In particular, OPM found that the
divorce decree did not order survivor annuity benefits for
her, that she was no longer considered a current spouse,
and that there was no record that Myron elected to pro-
4 DACHNIWSKYJ v. OPM
vide survivor annuity benefits for Theresa as a former
spouse at any time between the date of the divorce and
the date of his death.
Theresa appealed OPM’s decision to the Board. The
Administrative Judge notified Roksoliana of her right to
participate in the appeal as an intervenor because her
interests might be affected. OPM provided the Board
with the administrative record concerning Theresa’s
application for benefits, but, for unknown reasons, did not
include the record concerning Roksoliana’s request for
benefits, nor the communications between Myron and
OPM from 2002 and 2006.
On July 16, 2010, the Administrative Judge issued an
initial decision granting Theresa survivor annuity bene-
fits. The Administrative Judge found that the annual
notices OPM sent to Myron were insufficient to meet its
statutory obligations because OPM failed to inform him
that his pre-divorce election of a survivor annuity was
automatically voided by his divorce from Theresa. How-
ever, the Administrative Judge held that, based upon
Myron’s continued receipt of a reduced survivor annuity
“and his failure to take any steps to notify OPM of his
divorce or his remarriage . . . it was reasonable for [My-
ron] to have believed he was not required to do anything
else to provide his ex-wife with an annuity.” App’x 58.
Accordingly, the Administrative Judge ordered OPM to
grant Theresa’s application for the survivor annuity. The
initial decision said nothing about Roksoliana’s rights.
Both OPM and Roksoliana appealed the initial deci-
sion to the full Board for review. Along with its petition
for review, OPM included several relevant documents it
had previously failed to produce. These included Myron’s
two letters from OPM in 2002 requesting survivor annui-
ty benefits for Roksoliana, his 2006 letter requesting to
change his survivor election to Roksoliana and its accom-
DACHNIWSKYJ v. OPM 5
panying divorce decree, and his request to transfer full
survivor annuity benefits to Roksoliana.
In its final decision the Board affirmed the initial
decision with respect to Theresa’s claim for benefits. The
Board agreed with the Administrative Judge that the
annual notice was insufficient to notify Myron of the effect
of a divorce on the survivor annuity previously designated
for Theresa, his former spouse. The Board further found
that Myron intended for Theresa to receive the survivor
annuity. According to the Board, the 2002 and 2006
communications between Myron and OPM did not contra-
dict this intent, because those communications only
discussed replacing Theresa with Roksoliana as the
beneficiary, not removing Theresa. Final Op. at 3.
With respect to Roksoliana’s entitlement to a survivor
annuity, the Board found OPM’s annual notice was ade-
quate to advise Myron of his rights and obligations, and
that Roksoliana was barred by Myron’s failure to timely
request survivor benefits. Id. at 4. Roksoliana timely
appealed to this court. 1 We have jurisdiction pursuant to
28 U.S.C. § 1295(a)(9).
DISCUSSION
The scope of our review in an appeal from the Board is
limited. This court must uphold a decision of the Board
unless it is “(1) arbitrary, capricious, an abuse of discre-
tion, or otherwise not in accordance with law; (2) obtained
without procedures required by law, rule, or regulation
having been followed; or (3) unsupported by substantial
evidence.” 5 U.S.C. § 7703(c); see Hernandez v. Office of
Pers. Mgmt., 450 F.3d 1332, 1334 (Fed. Cir. 2006).
1 Both Petitioner, Roksoliana, and Respondent, OPM,
request the Board’s decision be reversed. The court
granted Theresa’s motion for leave to intervene. See
Dachniwskyj v. Office of Pers. Mgmt., 2011 U.S. App.
LEXIS 17972 (Fed. Cir. Aug. 26, 2011).
6 DACHNIWSKYJ v. OPM
A federal employee who qualifies for a retirement
annuity may elect to receive a reduced annuity during his
lifetime to provide a survivor annuity for a spouse or
former spouse if the annuitant predeceases the spouse or
former spouse. 5 U.S.C. § 8339(j). Divorce generally
terminates a prior election of spousal survivor benefits. 5
U.S.C. § 8339(j)(5)(A)(ii). An annuitant who wishes to
reinstate the survivor annuity for a former spouse follow-
ing a divorce must re-elect a survivor annuity within two
years of the divorce. 2 5 U.S.C. § 8339(j)(3); 5 C.F.R.
§ 831.631(b)(5). Additionally, an annuitant who remar-
ries after divorce may elect a survivor annuity for the new
spouse within two years of remarriage. 5 U.S.C.
§ 8339(j)(5)(C)(i).
OPM is statutorily obligated to inform each annuitant
annually of his right to elect a survivor annuity. Pub. L.
No. 95-317, 92 Stat. 382 (1978) as amended by Reorgani-
zation Plan No. 2 of 1978, § 102, 92 Stat. 3783 (1978)
(codified at 5 U.S.C. § 8339 note (1988)). When this notice
is inadequate to inform the annuitant of his rights and
obligations in electing a beneficiary for his survivor annu-
ity “and the annuitant’s conduct is consistent with his
having made the election at issue,” OPM should allow the
annuitant to make the relevant election or, if the annui-
tant is deceased, grant the survivor benefits as if the
deceased had made a timely election. Brush v. Office of
Pers. Mgmt., 982 F.2d 1554, 1560 (Fed. Cir. 1992). For
instance, this court has held that “[a] former spouse may
receive survivor annuity benefits even without an affirm-
ative election by the annuitant if (1) the annuitant did not
receive the required notice, and (2) there is evidence
2 Alternatively, a divorce or annulment decree may
require that the former spouse be awarded the survival
annuity benefits. 5 U.S.C. § 8341(h)(1). No such provision
was made in Myron and Theresa’s divorce decree.
DACHNIWSKYJ v. OPM 7
sufficient to show that the retiree indeed intended to
provide a survivor annuity for the former spouse.” Her-
nandez, 450 F.3d at 1334-35 (citations and quotations
omitted). Where OPM fails to comply with the notice
requirement, and there is evidence of the annuitant’s
intent, the Board has either ordered OPM to allow the
annuitant to make the election outside the statutory time
limits ‘“or grant the survivor benefits as if the deceased
had made a timely election.”’ Simpson v. Office of Pers.
Mgmt., 347 F.3d 1361, 1366–67 (Fed. Cir. 2003) (quoting
Brush, 982 F.2d at 1560).
In Simpson, this court held that OPM’s annual notice
was insufficient to notify an annuitant of his rights and
obligations with respect to electing a former spouse since
it failed to inform the annuitant that a pre-divorce elec-
tion is automatically terminated and he must make a new
election to provide a survivor annuity for a former spouse.
347 F.3d at 1364–65. Here, there is no dispute that the
notices sent to Myron failed to inform him that his divorce
voided his prior election of spousal survivor benefits.
Accordingly, OPM’s annual notice was inadequate to
notify Myron of his rights and obligations with respect to
electing his former spouse, Theresa, to receive the survi-
vor annuity.
The notice was also insufficient to inform Myron of his
rights and obligations with respect to electing his new
spouse, Roksoliana, to receive the survivor annuity, and
the Board erred in holding otherwise. The notice explains
only that an annuitant may request a reduced annuity to
provide survivor benefits for a spouse married before or
after retirement within a specified period of time. The
notice suffers from the same flaw recognized in Simpson;
it failed to inform Myron that his initial election was
terminated by virtue of his divorce. Due to this failure,
the notice was inadequate to inform Myron of the re-
quirement to make a new election following his divorce
8 DACHNIWSKYJ v. OPM
from Theresa in order to provide a survivor annuity for
his chosen beneficiary.
In short, the notice was insufficient to notify Myron of
his rights and obligations with respect to electing either
his former spouse, Theresa, or his new spouse, Roksoli-
ana. Accordingly, the next step is to consider evidence of
Myron’s intent and whether the Board’s grant of benefits
to Theresa is supported by substantial evidence. See
Brush, 982 F.2d at 1560.
In Simpson the court determined that the annuitant’s
continued acceptance of a reduced annuity following a
divorce, standing alone, adequately demonstrated the
annuitant’s intent to provide a survivor annuity for a
former spouse. 347 F.3d at 1367-68; see also Hairston v.
Office of Pers. Mgmt., 318 F.3d 1127, 1130–31 (Fed. Cir.
2003). However, in Hernandez, the court found that the
annuitant’s continued acceptance of a reduced annuity
was insufficient in light of other evidence showing he had
taken affirmative steps to discontinue survival benefits
for his former spouse after the divorce. 450 F.3d at 1335.
The court stated that “[s]uch actions are fundamentally
inconsistent with the intent to continue to provide such
benefits.” Id.
Here, the Board found Myron had the intent to pro-
vide a survivor annuity to his former spouse, Theresa. In
doing so, the Board improperly discounted the evidence
and actions Myron took that demonstrate his intent to
provide a survivor annuity for Roksoliana, not Theresa.
The Board determined that the 2002 and 2006 communi-
cations between Myron and OPM “discussed replacing”
Theresa as the designated beneficiary with Roksoliana.
Final Op. at 3 (emphasis in original). The Board stated
that “[t]here is only one document in the record that
unconditionally requests the appellant be removed as
beneficiary,” but it “bears no date, does not indicate if
there were additional pages that may have conditioned
DACHNIWSKYJ v. OPM 9
the request, and bears no proof that it was ever submitted
to OPM.” Id. (emphasis in original). The Board concluded
that because it could not “confirm the veracity of this
document, and [Myron] did not choose to submit this
document to OPM, we cannot interpret it as an expression
of his intent to unconditionally revoke his election of
[Theresa] as his beneficiary.” Id.
The Board’s reasoning is flawed. As noted above, it is
true that “‘an employee’s continued acceptance of a re-
duced annuity following divorce, standing alone, ade-
quately demonstrate[s] that employee’s intent to provide a
survivor annuity for the former spouse.”’ Hernandez, 450
F.3d at 1335 (quoting Wood v. Office of Pers. Mgmt., 241
F.3d 1364, 1368 (Fed. Cir. 2001)) (alteration in original).
Here, however, Myron’s continued acceptance of a reduced
annuity does not stand alone. He took multiple affirma-
tive steps to replace his former spouse with his current
spouse as beneficiary. Even ignoring the document the
Board concluded could not be verified, Myron’s actions are
completely inconsistent with the intent to continue to
provide benefits for his former spouse. In 2006, Myron
submitted a request to OPM to change his beneficiary
from Theresa to Roksoliana, providing his divorce decree
from the former and marriage certificate to the latter.
OPM requested clarification of his intent and Myron
responded that he was electing to transfer survivor bene-
fits to Roksoliana. OPM notified Myron that his election
to transfer survivor benefits from Theresa to Roksoliana
was effective immediately. We believe OPM’s decisions to
grant Roksoliana survivor annuity benefits and to deny
Theresa survivor annuity benefits were correct. For these
reasons, the Board’s finding that Myron intended to
provide Theresa with a survivor annuity is not supported
by substantial evidence. That finding is reversed.
10 DACHNIWSKYJ v. OPM
CONCLUSION
The Board’s decision granting the survivor annuity to
Theresa is reversed.
REVERSED