Nancy C. Warrender v. Office of Personnel Management ( 2016 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
NANCY C. WARRENDER, DOCKET NUMBER
Appellant, DC-0845-15-1135-I-1
v.
OFFICE OF PERSONNEL DATE: December 16, 2016
MANAGEMENT,
Agency.
THIS FINAL ORDER IS NONPRECEDENTIAL 1
Nancy C. Warrender, Burlington, North Carolina, pro se.
Karla W. Yeakle, 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 as modified the reconsideration decision of the Office of Personnel
Management (OPM) reconsideration decision finding that she had been overpa id
$51,348.00 in civil service annuity benefits under the Federal Employees’
Retirement System (FERS) and denying her request for a waiver of the
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A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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).
overpayment. Generally, we grant petitions such as this one only when: 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 and AFFIRM the initial decision, which is now the Board’s final
decision. 5 C.F.R. § 1201.113(b).
BACKGROUND
¶2 By notice dated January 10, 2006, OPM notified the appel lant that her
disability retirement application was approved. Initial Appeal File (IAF), Tab 7
at 9. This notice advised the appellant that she must apply for Social Security
Administration (SSA) disability benefits, and if those benefits are approved sh e
immediately must notify OPM of the amount of the payment and the effective
date of payment. Id. In a letter dated January 16, 2006, OPM again notified the
appellant that OPM is required to deduct all or a part of the SSA disability
benefits from the FERS disability benefits paid to her and that she was required to
notify OPM of the status of her application for SSA benefits. Id. at 12. This
letter expressly advised the appellant that, if she were overpaid FERS disability
benefits because of receipt of SSA disability benefits, OPM would notify her of
the overpayment and she legally would be required to repay this money to OPM.
OPM advised the appellant to set aside any SSA retroactive payment “so that you
have sufficient funds to repay your duplicate payment.” Id.¶3 By notice dated March 16, 2015, OPM notified the appellant that it had
determined that she became entitled to SSA benefits, effective August 1, 2009,
and that she had been overpaid $51,348.00 in civil service annuity benefits for the
period August 1, 2009, through February 30, 2015. Id. at 42. OPM further
notified the appellant that the repayment would be recovered in monthly
installments, provided her a proposed collection schedule, and provided the
opportunity to request reconsideration. Id. at 42-43. The appellant requested
reconsideration, and OPM issued a decision dated August 4, 2015, affirming its
initial decision. OPM specifically determined that the amount of the overpayment
was accurate, that the appellant failed to substantiate that collection would cause
her financial hardship, and that she was ineligible for waiver of the overpayment
because she should have set aside the funds for repayment to OPM. Id. at 33-34.
In addition, OPM found that recovery would not be against equity and good
conscience. Id. Accordingly, OPM established a repayment schedule of
150 monthly installments of $341.16 and one final installment of $174.00 .
¶4 On appeal, the appellant stated that OPM has reduced her annuity to such an
extent that she cannot pay rent and that she now qualifies for Federal nutritional
assistance. She asserted that she still suffers from the disabilities underlying her
disability retirement in 2004, among other medical conditions. IAF, Tab 1 at 13.
OPM responded that the appellant was advised at least twice of the consequences
of receiving SSA benefits and her legal obligation to set aside any retroactive
SSA benefit award to offset the FERS overpayment she had received, and that,
under the set-aside rule, waiver of collection is not available, absent exceptional
circumstances, which are not present in this case. IAF, Tab 7 at 4 -6. OPM also
determined, based upon the appellant’s September 1, 2015 Financial Resources
Questionnaire (FRQ), that after a $50.00 expense allowan ce, the appellant’s
monthly income exceeded her expenses by $335.00. In doing so, OPM reduced
the appellant’s monthly food expense from $900.00 to $310.00, finding that
$900.00 per month for food for one person is excessive.
¶5 Because the appellant withdrew her hearing request, the administrative
judge based his decision upon the written record. IAF, Tab 28, Initial Decision
(ID) at 1. The administrative judge found that OPM established the existence and
amount of the overpayment and that the appellant did not establish her eligibility
for waiver of the overpayment. However, because the administrative judge found
that the appellant provided evidence showing that she now bears fairly significant
financial hardships, he adjusted OPM’s repayment schedule downward to
342 installments at $150.00, and a final installment of $48.00. ID at 11. In
addition, the administrative judge advised the appellant that, if she experiences
any financial crisis in the future, she could file a mid-collection request to OPM
for lower payments. ID at 11-12.
DISCUSSION OF ARGUMENTS ON REVIEW
¶6 The appellant has not challenged the administrative judge’s determination
that OPM established the existence and amount of the overpayment, and we
affirm that determination. On review, however, the appellant reasserts that she
was not at fault in creating the overpayment, and she contends that the
overpayment should be waived because of her financial situation. 2 Petition for
Review (PFR) File, Tab 1 at 2-3. Thus, we construe the appellant’s petition for
review as a challenge to the administrative judge’s determination that she is not
entitled to a waiver of the collection of the overpayment. 3
¶7 To be entitled to a waiver, an appellant must show by substantial evidence
that: (1) she was without fault in creating the overpayment; and (2) recovery of
2
She also contends that no overpayment occurred because she needed the money for her
basic needs, medical care, and medications, and that the funds were direct deposited by
OPM into her bank account. She asserts that “the payment process and direct deposits
were nothing I had any control over or I would have selected larger deposits.” PFR
File, Tab 1 at 3.
3
On November 15, 2016, several months after filing her petition for review, the
appellant filed an additional pleading. PFR File, Tab 11. Because the appellant failed
to first request leave from the Clerk of the Board as required by 5 C.F.R.
§ 1201.114(a)(5) prior to filing her additional pleading, we have not considered it.
the overpayment would be against equity and good conscience. 5 U.S.C.
§ 8470(b); Zucker v. Office of Personnel Management, 114 M.S.P.R. 288, ¶ 7
(2010); 5 C.F.R. §§ 845.301, 845.307(b).
¶8 A recipient of an overpayment is without fault if she “performed no act of
commission or omission that resulted in the overpayment.” 5 C.F.R. § 845.302.
Here, the administrative judge found that, because OPM notified the appellant of
the consequences of SSA’s approval of her application for disability benefits, she
failed to establish that she was without fault with respect to the overpayment. ID
at 8. We agree. As the administrative judge correctly noted, a relevant factor in
determining whether an annuitant is at fault is if she received a payment that she
should have known was erroneous. ID at 8; see James v. Office of Personnel
Management, 72 M.S.P.R. 211, 217-19 (1996); 5 C.F.R. § 845.302(a)(3). As
stated above, OPM notified the appellant of the consequences of SSA’s approval
of her application for SSA disability benefits. IAF, Tab 7 at 9 -16. Thus, the
appellant knew or should have known that the payme nt she received was
erroneous.
¶9 Further, the administrative judge correctly determined that even if the
appellant were not at fault, she failed to establish that recovery of the
overpayment would be against equity and good conscience. ID at 8. Generally,
recovery is against equity and good conscience when it would cause financial
hardship from whom it is sought, the recipient 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.
5 C.F.R. § 845.303. However, individuals who know or suspect that they are
receiving overpayments must set aside the amount overpaid pending recoupment.
IAF, Tab 8 at 64, Policy Guidelines on the Disposition of Overpayments under the
Civil Service Retirement System and Federal Employees’ Retirement System
§ I.C.4 (1995) (Policy Guidelines). When, as here, the set-aside rule applies,
recovery by OPM is not against equity and good conscience and cannot be waived
absent exceptional circumstances, which do not include financial hardship.
James, 72 M.S.P.R. at 217. Having identified no exceptional circumstances other
than alleged financial hardship, we agree with the administrative judge that the
appellant failed to establish her entitlement to a waiver of the overpayment.
¶10 As the administrative judge correctly found, however, although financial
hardship does not constitute a basis for outright waiver of the debt collection, an
appellant is entitled to an adjustment of OPM’s repayment schedule when she
shows that recovery under that schedule would cause her financial hardship.
James, 78 M.S.P.R. at 217-19; 5 C.F.R. § 845.304. The administrative judge
thoroughly reviewed the appellant’s income and expenses, including the
information the appellant provided on the FRQ, and found that she provided
evidence with her appeal showing that she now bears fairly significant financial
hardships. Consequently, the administrative judge adjusted the appellant’s
repayment schedule to 342 installments at $150.00 and one final installment of
$48.00. OPM does not contest the administrative judge’s determination to do so
on review, and we find no basis to disturb it.
¶11 The appellant also claims that the administrative judge erred in finding that
OPM recommended that she hold that award until such time as it notified her of
the amount of her overpayment so she would have sufficient funds to repay the
duplicate payment. PFR, Tab 1 at 3; ID at 3. The record evidence clearly
establishes otherwise. IAF, Tab 7 at 9-15. The appellant received two notices
from OPM dated January 10, 2006, and March 16, 2006, both of which explicitly
advised the appellant that she was required to set aside the SSA checks to repay
OPM for the reduction, which should have been made in the FERS annuity. Id.Indeed, the appellant even responded to the OPM notification dated March 16,
2006, and advised OPM that she had filed a reconsideration appeal of the initial
denial of her SSA benefits. Id. at 14-15. Thus, we find no merit to this
argument.
¶12 To the extent the appellant may be requesting a further adjustment of her
repayment schedule due to changes in her expenses, as the administrative judge
correctly advised her, any such request for further adjustment of the repayment
schedule should be addressed to OPM, as provided by section V(F)(5) of OPM’s
Policy Guidelines. See Martin v. Office of Personnel Management, 49 M.S.P.R.
134, 137 (1991), aff’d, 960 F.2d 156 (Fed. Cir. 1992) (Table). Accordingly, we
find no basis upon which to disturb the initial decision.
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 cal endar 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).
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 services 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.