Melton v. Army

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
HEATHER A. MELTON,
Petitioner
v.
DEPARTMENT OF THE ARMY,
Respondent
______________________
2016-1780
______________________
Petition for review of the Merit Systems Protection
Board in No. CH-0752-09-0448-X-1.
______________________
Decided: November 3, 2016
______________________
HEATHER A. MELTON, Clarksville, TN, pro se.
ROBERT C. BIGLER, Commercial Litigation Branch,
Civil Division, United States Department of Justice,
Washington, DC, for respondent. Also represented by
BENJAMIN C. MIZER, ROBERT E. KIRSCHMAN, JR., FRANKLIN
E. WHITE, JR.
______________________
Before LOURIE, O’MALLEY, and TARANTO, Circuit
Judges.
2 MELTON v. ARMY
PER CURIAM.
Heather Melton was a civilian employee of the De-
partment of the Army when, in 2009, the Army suspended
her because she did not maintain a needed security clear-
ance. She challenged that suspension before the Merit
Systems Protection Board. In 2010, she and the Army
entered into a settlement agreement, which, the Board
eventually ruled, settled all pre-settlement employment-
related matters. Ms. Melton later petitioned the Board to
enforce the agreement, claiming that the Army violated
the agreement by withholding money from amounts
otherwise owed to her post-settlement to recoup pre-
settlement government payments of her health care
premiums. The Board ordered the Army to refund the
money it had withheld, and the Board later determined
that the Army complied with the order.
Ms. Melton now petitions for review by this court.
She argues that the Army has still not complied with the
settlement agreement because, among other things, a
post-settlement Leave and Earnings Statement shows a
deduction of $1,019.89 for repayment of pre-settlement
debt to the government. Because the Board did not
address that Statement, we vacate and remand for fur-
ther consideration of her entitlement to have that
$1,019.89 refunded to her. We reject Ms. Melton’s other
challenges.
I
Ms. Melton was indefinitely suspended without pay
from her position as an Information Technology Specialist
with the Army on February 12, 2009. She was returned
to duty on January 31, 2010, but placed on ordinary leave
without pay on May 23, 2010. After exhausting possibili-
ties of relief from the Office of Special Counsel and the
Central Clearance Facility, Ms. Melton appealed her
initial suspension to the Board.
MELTON v. ARMY 3
The parties entered into a settlement agreement with
an effective date of August 5, 2010. In the agreement, the
Army promised to pay Ms. Melton a lump sum of $35,000
in exchange for her voluntary resignation and agreement
to “release the ARMY from all claims or demands she may
have arising out of her employment with the ARMY
occurring prior to the effective date of this Agreement.”
Respondent’s App. 57–58. The agreement states that it is
a “full and final settlement of all issues involving the
employment and resignation of Ms. Melton from the
employment of the ARMY, as well as any other matters
related to Ms. Melton’s employment with the ARMY.” Id.
at 57. Ms. Melton resigned on August 7, 2010, the Board
dismissed the appeal as settled on August 16, 2010, and
Ms. Melton’s attorney was issued a voucher for $35,000 on
August 23, 2010.
A dispute arose almost immediately. On September
9, 2010, Ms. Melton received a bill from the Defense
Finance and Accounting Service (DFAS) Civilian Pay
Office for health insurance premiums that the govern-
ment had paid on her behalf before the settlement—
specifically, while she was on leave without pay from
February 12, 2009, through January 31, 2010, and from
May 23, 2010, through August 7, 2010. When Ms. Melton
did not pay the amount due, the debt was referred to the
Defense Debt Management Service and then to the U.S.
Department of the Treasury for collection through wage
garnishment. Ms. Melton requested an administrative
hearing on September 24, 2013. On December 17, 2013,
the DFAS hearing official upheld the validity of
Ms. Melton’s $3,797.40 debt (consisting of $2,929.29 in
principal plus $868.11 in interest plus fees) and deter-
mined that garnishment was appropriate. In payment of
that debt, $2,998.72 was garnished ($2,981.72 towards
4 MELTON v. ARMY
the debt and a $17 Treasury fee). Respondent’s App. 65–
67. 1
Ms. Melton filed a petition for enforcement of the set-
tlement agreement with the Board on January 28, 2014,
claiming that any attempt to collect the pre-settlement
debt was a violation because the settlement agreement
had cancelled the debt. On January 5, 2015, the Board-
assigned administrative judge found that the Army was
entitled to collect the health insurance premium debt
because that debt was not covered by the settlement
agreement. On June 18, 2015, the full Board reversed,
holding that the language of the settlement agreement
was “unambiguous” in its intent to be a “full and final
settlement of all employment-related matters,” including
the health insurance premium debt. Respondent’s App.
44–45. The Board ordered the Army to document its
compliance with the settlement agreement within 45
days. The Army subsequently submitted documentation
that it had cancelled the $2,929.29 debt principal and had
refunded to Ms. Melton all the money it had garnished—a
total of $2,998.72, representing $2,981.72 it had collected
towards the debt plus a $17 collection fee. Satisfied that
the Army was in compliance, the Board entered a final
order dismissing the petition for enforcement.
Ms. Melton petitions for review by this court. She
contends that the Army is not yet in compliance with the
settlement agreement because, among other things, a
Leave and Earnings Statement, dated after the settle-
ment took effect, shows that the government deducted
$1,019.89 from her final paycheck for what she alleges is
1 It is not evident from the limited documentation
available to us what money owed to Ms. Melton the
government subtracted the $2,998.72 from. Ms. Melton
refers both to her “family’s income tax return” and to her
“wages.” Petitioner’s Br. 8.
MELTON v. ARMY 5
a pre-settlement debt. She also claims a violation of the
agreement on the ground that the Army promised to hire
her back but has not done so. In addition, her informal
brief to us makes certain allegations not tied to enforce-
ment of the settlement agreement—that she was sus-
pended and otherwise subjected to discrimination based
on her reporting of espionage spyware on military com-
puters, that she has been deprived of her civil rights, and
that the Army’s actions have caused her emotional dis-
tress.
We have jurisdiction under 28 U.S.C. § 1295(a)(9).
We note that, after she filed her informal brief, Ms. Mel-
ton filed Form 10 under this court’s Rules. Respondent’s
App. 69. In that Form, she states that she has abandoned
any claims based on race or related matters that in other
contexts present impediments to this court’s jurisdiction
in light of 5 U.S.C. §§ 7702(a)(1) and 7703(b)(1)–(2). See
Kloeckner v. Solis, 133 S. Ct. 596, 607 (2012). We need
not address whether, based on her informal brief alone,
we would have faced questions about this court’s jurisdic-
tion. See Oja v. Dep’t of Army, 405 F.3d 1349, 1355 (Fed.
Cir. 2005). In light of her Form 10, there are no such
questions now.
II
We must affirm the Board’s decision unless it is “(1)
arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law; (2) obtained without proce-
dures required by law, rule, or regulation having been
followed; or (3) unsupported by substantial evidence.” 5
U.S.C. § 7703(c). It is Ms. Melton’s burden to establish
agency error. McCrary v. Office of Pers. Mgmt., 459 F.3d
1344, 1347 (Fed. Cir. 2006). “A settlement agreement is a
contract, and its construction is a matter of law which this
court reviews de novo.” Lutz v. U.S. Postal Serv., 485
F.3d 1377, 1381 (Fed. Cir. 2007) (quoting Lary v. U.S.
Postal Serv., 472 F.3d 1363, 1367 (Fed. Cir. 2006)). It is
6 MELTON v. ARMY
Ms. Melton’s burden to show material non-compliance
with the terms of the settlement agreement. Id.
A
Regarding the settlement agreement, we address
Ms. Melton’s arguments that the Army still has not
complied with the agreement. We note first that, to the
extent that Ms. Melton is now challenging the validity of
the settlement agreement, we do not think that any such
challenge is properly before us. A petitioner may have a
settlement set aside if “the agreement is unlawful, was
involuntary, or was the result of fraud or mutual mis-
take.” Sargent v. Dep’t of Health & Human Servs., 229
F.3d 1088, 1091 (Fed. Cir. 2000). The Board acknowl-
edged some language in Ms. Melton’s petition before it
which alleged “mutual mistake” and “fraud,” but it de-
clined to treat those allegations as a challenge to the
settlement agreement itself because Ms. Melton did not
seek to invalidate the settlement agreement. We see no
error in the Board’s interpretation of Ms. Melton’s peti-
tion before it, and, on appeal, Ms. Melton does not press
her claims of fraud or mutual mistake. To the extent that
Ms. Melton is now challenging the validity of the settle-
ment agreement on other grounds, those grounds were
not presented to the Board and are therefore not properly
before us.
1
As to the Army’s compliance with the settlement
agreement, Ms. Melton makes essentially two arguments
about Army non-compliance regarding collection of the
pre-settlement debt based on government payment of her
health insurance premiums. First, she contends that the
Army has not refunded all the money it garnished. She
does not provide us with any documentation of the gar-
nished amount, but she states in her opening brief that
the Army “garnished [her] family’s income tax return for
almost $3,000.” Petitioner’s Br. 8. That statement is
MELTON v. ARMY 7
consistent with the $2,998.72 amount the government
indicates was refunded to her. Respondent’s App. 67.
Substantial evidence, in the form of a record showing the
cancellation of Ms. Melton’s debt and a Treasury check for
$2,998.72, supports the Board’s finding that the govern-
ment has cancelled the debt and refunded what it gar-
nished.
Ms Melton’s second collection-focused argument is
that the Army violated the agreement because, after the
agreement took effect, it deducted $1,019.89, from money
otherwise due her, to recoup some of the pre-settlement
government payments of her health insurance premiums.
The Army does not dispute the Board’s conclusion that it
must refund money collected after the effective date of the
settlement in payment of pre-settlement employment-
related debts that Ms. Melton owed the Army. We con-
clude that the $1,019.89 deduction warrants a remand to
the Board for further examination.
Ms. Melton has provided evidence suggesting that the
Army improperly collected, and has not refunded, the
$1,019.89 she identifies. Specifically, she has provided a
Leave and Earnings Statement for the pay period ending
August 28, 2010, a period after the effective date of the
settlement and her resignation. 2 Petitioner’s Br. Apps. B,
C; Respondent’s Br. 68. It shows an amount to be paid
out for accrued annual leave, but then includes a
$1,019.89 deduction for prepaid federal employee health
benefits. Respondent’s App. 68. It is not clear how this
$1,019.89 amount was calculated, but the figure exactly
offsets the net amount the Army otherwise would have
2 Ms. Melton shows that she filed the Statement
with the Board on October 20, 2015, as part of the Com-
pliance Referral docket CH-0752-09-0448-X-1. Petition-
er’s Apps. B, C. The government does not challenge the
timeliness of that submission. See Respondent’s Br. 8–9.
8 MELTON v. ARMY
paid Ms. Melton for her annual leave accrued before her
resignation. The statement shows that she was owed
$2,158.32 of accrued leave, minus $988.35 for advanced
sick leave she had taken, resulting in $1,169.97. Id.
From that figure, $150.08 of taxes was deducted ($2.18 for
Medicare, $9.31 for OASDI, and $138.59 in federal tax),
leaving $1,019.89 of wages owed her. Id. Exactly that
amount was then deducted in payment of the health
insurance premium debt, such that Ms. Melton’s net pay
for the period was zero. Id.
It appears undisputed that the $1,019.89 deduction
was for money owed for a pre-settlement debt for govern-
ment payment of Ms. Melton’s health insurance premi-
ums and, in addition, that Ms. Melton was entitled to a
refund of that amount—collected after the settlement—
under the Board’s uncontested interpretation of the
settlement agreement. The government states: “As the
pay period covered by the [Leave and Earnings State-
ment] was after August 5, 2010, Ms. Melton would be
entitled to a refund of the $1,019.89 deducted during this
period.” Respondent’s Br. 8.
The government argues that there nevertheless is not
harmful error in the Board’s ruling now here on review.
The government’s rationale is that “the refund check
[Ms. Melton] provides shows a total of $2,998.72 was
refunded to her, which presumably would include the
$1,019.89.” Respondent’s Br. 8–9. Indeed, the govern-
ment adds, the refund check is greater than $2,336.63,
“the total prepaid health insurance premium collected
year to date” shown on the August 28 Leave and Earning
Statement. Id. at 9. For those reasons, the government
concludes, Ms. Melton is not “owed any additional mon-
ey.” Id. at 8.
The Board has not specifically addressed the
$1,019.89 issue. Nor, therefore, has it addressed the
argument now advanced by the government for why Ms.
MELTON v. ARMY 9
Melton is not owed more than she already has been
repaid. And we have reason to doubt the soundness of the
government’s argument.
The total amount of the premiums the government
paid on Ms. Melton’s behalf was $5,265.82. In determin-
ing the amount Ms. Melton still owed at the time of her
administrative garnishment hearing, DFAS subtracted
both the $1,316.64 deducted from the paychecks
Ms. Melton received during the February 1, 2010, through
May 22, 2010, period ($164.58 for each of 8 pay periods
when she was not on leave without pay) and the
$1,019.89 deducted on the final Leave and Earnings
Statement for the pay period ending August 28, 2010.
Because she had already paid back a total of $2,336.53
($1,316.64 plus $1,019.89), DFAS determined that
Ms. Melton’s remaining debt principal was $2,929.29
($5,265.82 minus $2,336.53)—to which was added interest
and fees to arrive at the final debt of $3,797.40. It was
based on that amount that the government garnished
“almost $3,000” (according to petitioner) or $2,998.72
(according to the Army). And the amount eventually
refunded to her after the Board’s enforcement ruling was
tied to that garnished amount, collected in payment of a
debt calculated on the premise that the government had
already recouped the $1,019.89.
If that particular recoupment was improper, as the
government seemingly agrees, the refund seemingly did
not repay it. That amount appears still to be owed to
Ms. Melton, in addition to the money already refunded for
the garnished amount. But we draw no final conclusion.
Instead, we remand to the Board for consideration of the
issue.
2
Ms. Melton contends that the Army is out of compli-
ance with the settlement agreement on an additional
ground: she alleges that the Army promised in the settle-
10 MELTON v. ARMY
ment agreement to rehire her and has not done so. The
Board did not address this argument, which the govern-
ment says was not raised before the Board, Respondent’s
Br. 13. Regardless, we see no merit in the argument.
Ms. Melton has provided us no documentation of the
Army’s alleged promise. And the settlement agreement
not only clearly states that Ms. Melton agreed to resign
voluntarily but also contains a merger clause declaring:
“This Agreement constitutes the complete understanding
between Ms. Melton and the ARMY and supersedes any
previous agreements or understandings between the
parties. No other promises or agreements will be binding
unless signed by both parties.” Respondent’s App. 58–59.
Ms. Melton has not shown the promise she alleges to
support this non-compliance argument.
B
There is no error in the Board’s refusal to consider
Ms. Melton’s whistleblower reprisal claim. The Board
correctly determined that any claims she may have had
relating to her employment were released as part of the
settlement agreement, in which she agreed “to release the
ARMY from all claims or demands she may have arising
out of her employment with the ARMY occurring prior to
the effective date of his Agreement.” Respondent’s App.
58. Ms. Melton does not contend that she has suffered
retaliation since the effective date of the settlement.
C
Ms. Melton’s remaining claims were not part of the
Board’s decision, and we decline to consider them for the
first time on appeal. The Board noted in its final decision,
which found the Army in compliance and dismissed the
petition for enforcement, that Ms. Melton had raised
many issues in her filings that were unrelated to the
compliance issues before the Board, and it correctly
determined that its jurisdiction was limited to enforcing
the terms of the settlement agreement. Respondent’s
MELTON v. ARMY 11
Ohio App. 53 n.2 (citing 5 C.F.R. §§ 1201.181(a), 1201.182(a));
see Manley v. Dep’t of the Air Force, 91 F.3d 117, 119–20
(Fed. Cir. 1996) (holding that, while the Board’s jurisdic-
tion to enforce a settlement agreement was not limited to
the aspects of the settlement agreement which are within
the Board’s independent jurisdiction, the Board’s en-
forcement power was limited to the scope of the settle-
ment agreement). Ms. Melton has not shown that her
remaining claims involve the settlement agreement so as
to come within the Board’s enforcement jurisdiction in
this proceeding. To the extent that those claims were
raised before the Board, the Board correctly declined to
enforce them.
CONCLUSION
For the foregoing reasons, we affirm the Board’s deci-
sion with one exception: We vacate the decision to the
extent it denies a further refund of $1,019.89, and we
remand for consideration of that issue.
No costs.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED