Audrey D. Mccadney v. Office of Personnel Management ( 2016 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
AUDREY D. MCCADNEY, DOCKET NUMBER
Appellant, SF-0845-16-0346-I-1
v.
OFFICE OF PERSONNEL DATE: December 27, 2016
MANAGEMENT,
Agency.
THIS FINAL ORDER IS NONPRECEDENTIAL 1
Audrey D. McCadney, Inglewood, California, pro se.
Roxann Johnson, Washington, D.C., for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
FINAL ORDER
¶1 The appellant has filed a petition for review of the initial decision, which
affirmed the reconsideration decision of the Office of Personnel Management
(OPM) concerning an overpayment. Generally, we grant petitions such as this
one only when: the initial decision contains erroneous fin dings of material fact;
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A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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 id entified by the Board
as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c).
2
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 dili gence, was not
available when the record closed. See 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 and AFFIRM the initial decision, w hich is now the Board’s
final decision. 5 C.F.R. § 1201.113(b).
¶2 The appellant filed an appeal with the Board challenging a reconsideration
decision by OPM, affirming its initial determination that she received an
overpayment of disability retirement annuity benefits in the amount of $8,208.74,
and that recovery of the overpayment would not be agai nst equity and good
conscience. Initial Appeal File (IAF), Tab 1, Tab 6 at 6, 15, 60. On June 28,
2010, OPM approved the appellant’s application for disability retirement under
the Federal Employees’ Retirement System (FERS). IAF, Tab 6 at 28. In the
approval letter, OPM informed the appellant that her FERS disability benefits for
the first 12 months would equal 60 percent of her high-3-year average salary
minus 100 percent of her Social Security benefit for any month that she is entitled
to Social Security disability benefits. Id. at 62. OPM also stated that, after the
first year, her disability annuity would be equal to 40 percent of her high-3-year
average salary minus 60 percent of her Social Security benefit for any month in
which she was entitled to Social Security disability benefits. Id.¶3 OPM also advised the appellant to apply for Social Security disability
benefits and to notify OPM when her application was received and approved. Id.
at 61. OPM further cautioned the appellant that:
3
FERS disability benefits usually begin before the claim for Social
Security benefits is fully processed. Because the FERS disability
benefit must be reduced by 100 percent of any Social Security
benefit payable for 12 months, 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.
Id. OPM paid the appellant interim annuity payments from July 15, 2010 through
June 1, 2011. IAF, Tab 6 at 8. The July 15, 2010 check issued by OPM covered
her annuity payments for the period of October 24, 2009 to June 30, 2010, based
on an annuity commencement date of September 13, 2009. Id. at 7-8, 19.
¶4 On March 19, 2011, the Social Security Administration (SSA) issued a
notice of award stating that the appellant was eligible for Social Security
disability benefits retroactive to July 2009. Id. at 35. Social Security awarded
the appellant $16,426 for July 2009 through February 2011, and a recurrent
monthly payment of $1,105 beginning in March 2011. Id. OPM finalized her
annuity on June 2, 2011, adjusting her annuity to account for the amount of her
SSA award. Id. at 9. On June 7, 2011, OPM notified the appellant that she
received an annuity overpayment of $8,208.74 and proposed a 36-month
repayment plan. Id. at 15, 60. OPM stated that the overpayment occurred during
the period of September 13, 2009 to May 30, 2011, because the appellant’s
interim annuity payments were not reduced by the applicable SSA deduction
required by law. Id. at 9, 17.
¶5 The appellant filed a request for reconsideration and waiver on June 17,
2011, arguing that she did not receive an overpayment because the start date for
her annuity was incorrect and she was underpaid. IAF, Tab 6 at 13-14. The
appellant did not base her waiver request on financial hardship. On July 11,
2011, OPM responded to her request and confirmed that her last day of pay was
incorrect. Id. at 59. OPM changed the commencement date for her annuity from
September 13, 2009 to July 3, 2009, and recalculated her high-3-salary. Id. OPM
also determined that her annuity should have been higher and authorized a
4
payment of $4,633.87 for direct deposit in her bank account, representing the
difference in her annuity from July 3, 2009 to June 30, 2011. Id. OPM explained
that it paid that amount directly to the appellant rather than reducing the
overpayment because her request for reconsideration was still pending. Id.¶6 OPM issued a final decision, denying the appellant’s request for
reconsideration and affirming the existence and amount of her overpayment. Id.
at 6-11. OPM rejected the appellant’s argument that she remained underpaid and
found that she was not entitled to a waiver of her overpayment because she was
required by the principles of equity and good conscious to set aside any
retroactive payment she received from Social Security to pay any resulting debt
owed to OPM. Id. OPM also reaffirmed the originally proposed debt collection
schedule consisting of 36 installments of $228.02 with a final payment of . 02,
noting that the appellant did not submit evidence of financial hardship. Id. at 10.
¶7 The appellant filed an appeal with the Board arguing that she did not
receive any annuity overpayment because the agency acknowledged that she was
in fact underpaid. IAF, Tab 1. After holding a hearing, the administrative judge
issued an initial decision finding that OPM proved by preponderant evidence the
existence and amount of the $8,208.74 annuity overpayment to the appellant for
the period from September 13, 2009 to May 30, 2011. IAF, Tab 16, Initial
Decision (ID) at 5-8. The administrative judge found no underpayment remained
because OPM resolved that issue in 2011 when it corrected the start date for the
appellant’s annuity and paid her the amount owed because of that mistake,
leaving unaffected the existence and amount of the annuity overpayment to the
appellant. ID at 7. The administrative judge also found that the appellant was
not entitled to a waiver because she was at fault in causing the overpayment. ID
at 9-11. The appellant filed a petition for review. Petition for Review (PFR)
File, Tab 1.
¶8 OPM bears the burden of proving, by preponderant evidence, the existence
and amount of an annuity overpayment. See 5 C.F.R. § 831.1407(a). If OPM
5
meets that burden, the appellant bears the burden of proving, by substantial
evidence, her entitlement to a waiver or adjustment of the overpayment. See
5 C.F.R. § 831.1407(b). A waiver may be granted when the annuitant is without
fault and recovery would be against equity and good conscience. Davis v. Office
of Personnel Management, 109 M.S.P.R. 48, ¶ 7 (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 would be unconscionable
under the circumstances. Id.The administrative judge correctly found that OPM proved the existence and
amount of the overpayment.
¶9 The administrative judge found that OPM correctly determined the amount
and existence of an overpayment owing to the appellant’s having received
unreduced interim FERS disability retirement annuity payments during the period
from September 13, 2009 to May 30, 2011. ID at 7. The appellant argues on
review that the administrative judge failed to consider a June 2011 letter from
OPM determining that she was underpaid, and that her underpayment superseded
the overpayment determination by OPM. PFR File, Tab 1 at 5. The
administrative judge’s failure to mention all of the evidence of record does not
mean that he did not consider it in reaching his decision. Marques v. Department
of Health & Human Services, 22 M.S.P.R. 129, 132 (1984), aff’d, 776 F.2d 1062(Fed. Cir. 1985) (Table). As explained in the initial decision by the
administrative judge, OPM submitted documentation showing that the appellant
received an annuity overpayment in the amount of $8,208.74 that she is required
to repay, and there is no outstanding underpayment owed to the appellant. ID
at 7-8; IAF, Tab 6 at 19, 53, 59.
¶10 In the June 2011 letter to the appellant, OPM determined that it made an
error in the commencement date for her annuity, which caused an underpayment
of $4,633.87. ID at 7; IAF, Tab 6 at 19, 53, 59. Rather than deduct that sum
6
from the previously determined overpayment amount, OPM corrected the error by
directly paying the appellant $4,633.87, thereby leaving the amount of her
previously determined overpayment unchanged. IAF, Tab 6 at 53. The appellant
does not dispute the administrative judge’s finding that she received payment of
$4,633.87 from OPM, and she submits no new evidence or argument on review
showing that she remains underpaid. ID at 7.
¶11 Because the appellant also fails to identify any error in the administrative
judge’s finding that OPM properly determined the existence and amount of the
overpayment, we affirm the administrative judge’s finding on this issue . ID
at 5‑6; see Crosby v. U.S. Postal Service, 74 M.S.P.R. 98, 105-06 (1997) (finding
no reason to disturb the administrative judge’s findings when she considered the
evidence as a whole, drew appropriate references, and made reasoned
conclusions); Broughton v. Department of Health & Human Services, 33 M.S.P.R.
357, 359 (1987).
The administrative judge correctly found that the appellant is not entitled to a
waiver of the overpayment.
¶12 We further find that the administrative judge correctly found that the
appellant failed to establish her entitlement to a waiver of the overpayment. The
appellant bears the burden of establishing her entitlement to a waiver of recovery
of the overpayment by substantial evidence. See Knox v. Office of Personnel
Management, 107 M.S.P.R. 353, ¶ 5 (2007). To be entitled to a waiver, the
appellant must meet a 2-part test. She must show by substantial evidence that:
(1) she is without fault in creating the overpayment; and (2) recovery of the
overpayment would be against equity and good conscience. See 5 U.S.C.
§ 8470(b); Boone v. Office of Personnel Management, 119 M.S.P.R. 53, ¶ 5
(2012); 5 C.F.R. § 845.301.
¶13 On review, the appellant argues that OPM is solely at fault in the
overpayment. PFR File, Tab 5. A recipient of an overpayment is without fault if
she performed no act of commission or omission that resulted in the overpayment.
7
Vojas v. Office of Personnel Management, 115 M.S.P.R. 502, ¶ 18 (2011);
5 C.F.R. § 845.302. The pertinent considerations in finding fault are as follows:
(1) whether payment resulted from the individual’s incorrect, but not necessarily
fraudulent statement, which she should have known to be incorrect; (2) whether
payment resulted from the individual’s failure to disclose material facts in her
possession, which she should have known to be material; or (3) whether she
accepted a payment which she knew or should have known to be erroneous. Id.¶14 Applying the factors here, the administrative judge did not find that the
appellant was at fault because the overpayment resulted from either the first or
second considerations. The administrative judge, however, determined that the
appellant was at fault because she accepted a payment which she should have
known to be erroneous. ID at 9-11. The appellant does not dispute this finding
on review.
¶15 Specifically, the administrative judge found that the SSA notified the
appellant on March 19, 2011, that she was entitled to monthly disability benefits
retroactive to July 2009. Id. at 9. The administrative judge further found that the
appellant was on notice that she should not cash her checks from SSA absent
prior adjustment to her FERS annuity, because those checks would be needed to
pay OPM for the reduction which should have been made in her FERS annuity.
Id. The administrative judge found no evidence that the appellant did not cash
her SSA checks while continuing to accept her FERS annuity benefits and the
appellant submits no such evidence or argument on review . Id. We therefore find
no reason to disturb the administrative judge’s finding that she accepted a
payment that she should have known to be erroneous.
¶16 The administrative judge further found that the appellant did not qualify for
a waiver under the “prompt notification” exception in OPM’s “Policy Guidelines
on the Disposition of Overpayments under the Civil Service Retirement System
and Federal Employees’ Retirement System” (Guidelines). ID at 9-10; IAF,
Tab 6 at 64-103. The Guidelines dictate that a debtor should be found without
8
fault when the debtor promptly—in general, within 60 days—contacts OPM to
question the correctness of a payment or to report an overpayment, regardless of
whether the individual knew or should have known the payment was erroneous.
ID at 10; IAF, Tab 6 at 76 (Guidelines § I.B.6). The Guidelines also provide that
claims of contact should be supported by written evidence, or if not, then at least
a “reasonable and credible description of the asserted contact,” to include the
OPM employee office or employee contacted and the date of contact. IAF, Tab 6
at 73 (Guidelines § I.B.8).
¶17 The administrative judge found that the appellant testified that she only
contacted OPM after she received the notice of overpayment dated June 7, 2011,
and that contact occurred more than 60 days after SSA had notified her that it was
paying her disability payments. ID at 10 n.5. He further found that the appellant
contacted OPM to dispute that she received an overpayment, not to report an
overpayment. Id. The appellant argues on review that she was without fault
because she promptly requested reconsideration and provided everything OPM
requested, but she provides no evidence or argument that she contacted OPM to
question the correctness of a payment or to report an overpayment within the
specified time period. PFR File, Tab 1 at 5-6. We find that the administrative
judge correctly determined that the appellant was at fault in creating the
overpayment because she accepted a payment that she should have known to be
erroneous and she did not demonstrate good faith by promptly bringing the
overpayment to OPM’s attention; therefore, she does not qualify for a waiver
under the “prompt notification” exception. 2 ID at 10-11; IAF, Tab 6 at 72.
¶18 On review, the appellant also argues that recovery of the overpayment
would be against equity and good conscious because, inter alia, OPM failed to
issue a final decision within 4 years of her request for reconsideration and waiver,
2
The appellant also argued on review that she did not defraud the Government;
however, the administrative judge did not find that the appellant committed fraud. PFR
File, Tab 1 at 5.
9
and OPM made egregious errors that resulted in her annuity overpayment and
underpayment. 3 Id. at 6. Because we affirm the administrative judge’s finding
that the appellant was at fault in creating the overpayment, we need not address
the appellant’s argument that recovery would be against equity and good
conscience. ID at 11; see Vojas, 115 M.S.P.R. 502, ¶ 18; 5 C.F.R. § 831.1401.
We find that the administrative judge properly weighed the evidence, reached the
correct decision under the law, and issued a well-reasoned decision. We therefore
deny her petition for review. 4
NOTICE TO THE APPELLANT REGARDING
YOUR FURTHER REVIEW RIGHTS
You have the right to request review of this final decision by the U.S.
Court of Appeals for the Federal Circuit. You must submit your request to the
court at the following address:
United States Court of Appeals
for the Federal Circuit
717 Madison Place, N.W.
Washington, DC 20439
The court must receive your request for review no later than 60 calendar days
after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec. 27,
2012). If you choose to file, be very careful to file on time. The court has held
that normally it does not have the authority to waive this statutory deadline and
that filings that do not comply with the deadline must be dismissed. See Pinat v.
Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991).
3
According to the Guidelines, “errors or delays by OPM or other F ederal agencies, per
se, do not justify a without-fault finding,” but may be a factor in determining whether it
is against equity and good conscious to recover an overpayment from an individual
found without fault in creating the overpayment. IAF, Tab 6 at 71, 76 (Guidelines
§§ I.B.2, I.C.4).
4
The administrative judge noted that the appellant did not claim financial hardship or
detrimental reliance while her case was pending before OPM, and she did not seek an
adjustment in the recovery schedule. ID at 11. The appellant does not dispute these
findings on review.
10
If you need further information about your right to appeal this decision to
court, you should refer to the Federal law that gives you this right. It is found in
title 5 of the United States Code, section 7703 (5 U.S.C. § 7703) (as rev. eff. Dec.
27, 2012). You may read this law as well as other sections of the United States
Code, at our website, http://www.mspb.gov/appeals/uscode.htm. Additional
information is available at the court’s website, www.cafc.uscourts.gov. Of
particular relevance is the court’s “Guide for Pro Se Petitioners and Appellants,”
which is contained within the court’s Rules of Practice, and Forms 5, 6, and 11.
If you are interested in securing pro bono representation for an appeal to
the U.S. Court of Appeals for the Federal Circuit, you may visit our website at
http://www.mspb.gov/probono for information regarding pro bono representation
for Merit Systems Protection Board appellants before the Federal Circuit. The
Merit Systems Protection Board neither endorses the service s provided by any
attorney nor warrants that any attorney will accept representation in a given case.
FOR THE BOARD: ______________________________
Jennifer Everling
Acting Clerk of the Board
Washington, D.C.