Leath v. Office of Personnel Management

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2009-3244
ANDRE’ M. LEATH,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
Andre’ M. Leath, of Orange Park, Florida, pro se.
A. Bondurant Eley, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, for respondent. With her on
the brief were Tony West, Assistant Attorney General, Jeanne E. Davidson, Director,
and Harold D. Lester, Jr., Assistant Director.
Appealed from: Merit Systems Protection Board
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2009-3244
ANDRE’ M. LEATH,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
Petition for review of the Merit Systems Protection Board in AT0845090299-I-1.
___________________________
DECIDED: January 7, 2010
___________________________
Before RADER, PROST, and MOORE, Circuit Judges.
PER CURIAM.
Appellant Andre’ Leath appeals from the final decision of the Merit Systems
Protection Board (Board) affirming the decision of the Office of Personnel Management
(OPM) denying his request for waiver of repayment of a benefit overpayment paid under
the Federal Employees Retirement System (FERS). Leath v. Office of Pers. Mgmt., AT-
0845-09-0299-I-1, 2009 MSPB LEXIS 2946 (M.S.P.B. June 30, 2009). Because
substantial evidence supports the Board’s findings, we affirm.
BACKGROUND
Mr. Leath was employed as a mail handler at the United States Postal Service
until he retired in October 2005. Mr. Leath applied for disability retirement benefits
under the Federal Employees Retirement system (FERS) on July 13, 2005. OPM
approved Mr. Leath’s application for disability retirement benefits on September 28,
2005. The letter awarding Mr. Leath benefits also advised him that he was required to
apply for Social Security Administration (SSA) disability benefits, provide proof that he
had applied for SSA disability benefits, and notify OPM of any SSA disability benefits
received. The letter stated:
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% of any Social Security Benefit payable for 12 months,
Social Security 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.
J.A. 15.
On May 15, 2008, OPM sent a letter to Mr. Leath informing him that it had
received information that he was entitled to SSA disability benefits effective March 1,
2006, and that it was required to reduce his FERS disability benefit accordingly. OPM
further advised Mr. Leath that he had been overpaid in FERS annuity benefits in the
amount of $29,576.00 for the period of March 1, 2006 through April 30, 2008. Mr. Leath
completed a Financial Resources Questionnaire (FRQ) and requested that OPM waive
collection of the overpayment based on alleged financial hardship.
OPM evaluated whether Mr. Leath was entitled to a waiver of the collection of an
overpayment pursuant to 5 U.S.C. § 8470(b), which permits waiver when, in OPM’s
judgment, “the individual is without fault and recovery would be against equity and good
conscience.” Id. OPM further considered the related regulation, 5 C.F.R. § 845.302,
which states that pertinent factors in determining fault are:
(1) Whether payment resulted from the individual's incorrect but not
necessarily fraudulent statement, which he or she should have known to
be incorrect; (2) Whether payment resulted from the individual's failure to
disclose material facts in his or her possession, which he or she should
2009-3244 2
have known to be material; or (3) Whether he or she accepted a payment
that he or she knew or should have known to be erroneous.
OPM’s records showed that the letter of September 28, 2005 informed Mr. Leath of the
Federal retirement law requirements concerning SSA and disability benefits under
FERS. However, Mr. Leath did not notify OPM of his subsequent SSA award, which
OPM learned about only through the computer match program. OPM concluded that
Mr. Leath knew the consequence of receiving SSA benefits and should have set aside
any retroactive payments received from SSA for the purpose of paying OPM. OPM
determined that Mr. Leath did not meet the requirements of eligibility for waiver under 5
U.S.C. § 8470(b), absent exceptional circumstances. OPM stated that financial
hardship is not considered an exceptional circumstance and consequently denied Mr.
Leath’s request for waiver. OPM reviewed Mr. Leath’s FRQ, calculated that Mr. Leath
had a positive monthly income balance of at least $563.00, and indicated it would
accept recovery of the overpayment through 99 monthly installments of $298.74 and
one installment of $0.74.
Mr. Leath appealed the OPM final decision to the Board, asking the Board to
waive collection of the overpayment due to financial hardship and alleging that OPM
erroneously calculated his veterans’ disability compensation as household income. In a
telephonic status conference on May 14, 2009, the parties stipulated to the existence
and amount of the overpayment, the period of accrual, and Mr. Leath’s notification of
the legal requirement of the need to set aside and repay SSA benefits. The
Administrative Judge (AJ) found that the set-aside rule applied to Mr. Leath and that he
was not entitled to waiver of the overpayment. Consequently, the Board affirmed
OPM’s decision, and Mr. Leath appeals.
2009-3244 3
DISCUSSION
The scope of our review in an appeal from a decision of the Board is limited. We
must affirm the Board's decision unless it was “(1) arbitrary, capricious, an abuse of
discretion, 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 Briggs v. Merit Sys. Prot. Bd., 331 F.3d
1307, 1311 (Fed. Cir. 2003). Mr. Leath has the burden of proving entitlement to a
waiver of an overpayment by substantial evidence. 5 C.F.R. § 845.307(b) (“Burden of
annuitant. The recipient of an overpayment must establish by substantial evidence that
he or she is eligible for waiver or an adjustment.”).
On appeal, Mr. Leath argues that the Board erred in failing to take into account
his future financial liabilities, such as the need for a larger residence and future college
expenses, which we interpret as a request for waiver of his repayment obligations due
to alleged financial hardship. We do not find the Board's determination to be arbitrary,
capricious, or an abuse of discretion. Mr. Leath stipulated to the existence and amount
of overpayment, as well as notification of his requirement to repay the amount. Further,
evidence in the record supported the Board’s determination that the set-aside rule
applied to Mr. Leath, including the letter OPM sent to Mr. Leath notifying him of his
approval for disability retirement benefits dated September 28, 2005. There was
substantial evidence supporting the Board’s determination that the set-aside rule
applies to Mr. Leath and that waiver of the overpayment is not available to him.
Mr. Leath further seeks an adjustment of his repayment schedule, arguing that
the Board erroneously calculated his current income and ordinary and necessary living
expenses and liabilities. An annuitant seeking an adjustment of a repayment schedule
2009-3244 4
must show that he needs substantially all of his current income and liquid assets to
meet current ordinary and necessary living expenses and liabilities. 35 C.F.R. §
845.304. Mr. Leath submitted two FRQs from which to determine his financial ability to
pay the overpayment. The Board made several determinations regarding the proper
calculation of Mr. Leath’s ordinary and necessary living expenses. A calculation of
ordinary and necessary living expenses is based on “current income” and “current . . .
living expenses,” not speculative future expenses. See id. The Board properly refused
to consider speculative future expenses such as potential college expenses or the cost
of a future residence as requested by Mr. Leath. The Board reviewed Mr. Leath’s FRQ
and determined that Mr. Leath had a positive monthly income balance of at least
$563.00. The Board’s determination was based on substantial evidence.
Consequently, Mr. Leath was not entitled to an adjustment of his repayment schedule.
Mr. Leath also argues that the Board erred as a matter of law by including his VA
disability benefits as income for the purposes of determining a repayment schedule.
Whether VA disability benefits may be calculated as taxable income under the Internal
Revenue Code is not determinative of whether the benefits can be used for calculating
Mr. Leath’s current income for the purpose of determining a reasonable repayment
schedule. According to the Policy Guidelines on the Disposition of Overpayments under
the Civil Service Retirement System and the Federal Employees’ Retirement System,
I.D.3, Financial Hardship, U.S. Office of Personnel Management (May 1995), OPM may
consider income from “all sources which may reasonably be considered available for
the individual’s use,” including government benefits. The Board did not legally err when
2009-3244 5
it included Mr. Leath’s VA disability benefits as income in determining a proper
repayment schedule for Mr. Leath.
Mr. Leath further argues that the AJ was biased against him, because the AJ
allegedly “indirectly” told Mr. Leath in a telephone conversation that Mr. Leath was
“going to lose.” The only evidence of a telephone conversation between the AJ and Mr.
Leath in the record is a May 14, 2009 “Order and Summary of Telephone Status
Conference.” There is no evidence in the document of bias by the AJ or record of a
statement by the AJ similar to the one alleged by Mr. Leath. The parties were instructed
to submit any objections to the accuracy or inclusiveness of the summary in writing by
May 21, 2009. As there is no other evidence of bias in the record, Mr. Leath cannot
now bring a new, unsubstantiated claim of bias, having failed to object in writing as
advised.
We therefore affirm the Board’s decision.
COSTS
No costs.
2009-3244 6