Tamara C. Lusk v. Office of Personnel Management ( 2015 )

UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
TAMARA C. LUSK, DOCKET NUMBER
Appellant, DE-0845-15-0178-I-1
v.
OFFICE OF PERSONNEL DATE: September 11, 2015
MANAGEMENT,
Agency.
THIS ORDER IS NONPRECEDENTIAL 1
David W. Parker, Esquire, Salt Lake City, Utah, for the appellant.
Roxann Johnson, Washington, D.C., for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Mark A. Robbins, Member
REMAND ORDER
¶1 The Office of Personnel Management (OPM) has filed a petition for review
of the initial decision, which reversed OPM’s reconsideration decision finding
that the appellant had received an overpayment of $20,505 in retirement benefits.
For the reasons discussed below, we GRANT OPM’s petition for review,
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A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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).
2
VACATE the initial decision’s finding that OPM failed to establish the amount
certain owed by the appellant as a result of the overpayment, and REMAND the
case to the field office for further adjudication in accordance with this Order.
BACKGROUND
¶2 The appellant submitted an application for disability retirement under the
Federal Employees’ Retirement System (FERS) in May 2008. Initial Appeal File
(IAF), Tab 4 at 26-30. OPM approved her application in October 2008. Id.
at 38-39. In the approval letter, OPM notified the appellant that she was required
to apply for Social Security disability benefits, that she must notify OPM
immediately of the amount and effective date of any award of benefits, and that
she would need to withhold her Social Security disability payments for the first
12 months to pay OPM for the reduction in FERS benefits caused by the receipt
of Social Security disability benefits. Id. In March 2010, the Social Security
Administration (SSA) notified the appellant that she had originally been entitled
to Social Security disability benefits beginning in April 2009, and therefore
awarded her retroactive benefits for the prior period and monthly benefits
beginning in March 2010. Id. at 21-23. Later in March 2010, the appellant
notified OPM that she had been awarded Social Security disability benefits. Id. at
20. In April 2011, OPM received verification from SSA that the appellant had
been approved for benefits effective April 2009. Id. at 17.
¶3 OPM notified the appellant in April 2011, that she had been overpaid for
the period from April 2009, to April 2011, in the amount of $20,505 and that it
would collect this overpayment in monthly installments beginning in August
2011. IAF, Tab 4 at 11-12. OPM also informed the appellant of her right to seek
reconsideration of the amount or existence of the overpayment or to seek waiver
of the overpayment or adjustment of the monthly recovery amount. Id. at 12-13.
In May 2011, the appellant sought reconsideration. Id. at 9-10. In her request for
reconsideration, she stated, “I would like to see a breakdown of how this figure
3
was determined.” Id. at 10. She did not submit a request for waiver or
adjustment of the repayment schedule at that time. See id. at 9-10.
¶4 OPM did not issue its reconsideration decision until January 2015. IAF,
Tab 4 at 5-7. In its decision, OPM stated that the appellant began receiving an
annuity in March 2009, based upon 60% of her high-three average salary and,
beginning in April 2010, the annuity was recomputed to 40% of her high-three
average salary. Id. at 5. OPM further stated that, although the appellant became
entitled to Social Security disability benefits for the period beginning in
April 2009, OPM did not adjust her annuity, as is required by 5 U.S.C.
§ 8452(a)(2)(A), until April 2011. Id. at 5-6. OPM determined that she was
therefore overpaid $20,505. Id. at 5. Finally, because the appellant did not
submit a Financial Resources Questionnaire (FRQ), OPM found that she had not
shown that collection of the overpayment would cause financial hardship. Id.
at 7.
¶5 The appellant timely appealed OPM’s reconsideration decision. IAF, Tab 1.
She argued, inter alia, that: (1) repaying the overpayment would cause her
financial hardship; (2) OPM should have reduced her monthly payments when the
overpayment was identified; (3) she was not at fault regarding the overpayment
and was compliant with OPM’s instructions regarding reporting her Social
Security disability decision; and (4) her monthly payments of the overpayment
should be reduced to $50 or less per month. Id. On appeal, the appellant also
submitted a FRQ dated in January 2015. Id. OPM responded, asserting that the
appellant should have set aside any Social Security disability award amount she
received plus any subsequent annuity overpayments that she received. IAF, Tab 4
at 4. OPM also asserted that the Board lacks jurisdiction over the issue of waiver
of the overpayment because the issue was not addressed in its reconsideration
decision and that, regardless, waiver of the collection of the overpayment was
precluded. Id.
4
¶6 At the telephonic hearing, the appellant testified, inter alia, that her annuity
calculation should have accounted for the payment of attorney’s fees and costs
that she incurred in pursuing her Social Security disability benefits. IAF, Tab 10,
Hearing Compact Disc (HCD). She also testified that she received no explanation
of how her benefits were calculated and that she should be able to assert her
entitlement to a waiver of the overpayment at any time. HCD. OPM responded
to the appellant’s testimony by stating that it was required to reduce her annuity
and to seek the overpayment and that there is no provision for reducing the
overpayment based upon the payment of attorney’s fees and costs. 2 HCD.
¶7 The administrative judge issued an initial decision reversing OPM’s
reconsideration decision. IAF, Tab 12, Initial Decision (ID). Specifically, he
found that the appellant was overpaid due to her receipt of Social Security
disability benefits, but that OPM failed to establish an amount certain owed by
the appellant as a result of the overpayment. ID at 5 (citing Grasso v. Office of
Personnel Management, 76 M.S.P.R. 299, 301 (1997)). The administrative judge
found that OPM properly calculated the appellant’s average pay. ID at 4.
However, he found that OPM erred in its FERS Paid and Due Calculation
worksheet because, although the worksheet stated that the appellant was paid
$1,654 per month for the period from April 1, 2010, through April 30, 2011, only
one such monthly payment was included in the calculation of payments received.
ID at 4. Additionally, the administrative judge found that the worksheet
contained an error in its calculation of the rate that the appellant should have
received per month when considering the offset for her Social Security disability.
Id. By applying the formula set forth in 5 U.S.C. § 8452(a)(2)(A), the
administrative judge determined that the appellant should have received $596 per
2
The appellant has cited no authority, and we can find none, for the proposition that she
is entitled to such a reduction in repaying any overpayment based upon her payment of
attorney’s fees and costs in pursuing her Social Security disability award. See
5 U.S.C. § 8452(a)(2)(A).
5
month for the first 12 months and $523 per month thereafter, as opposed to the
$841 per month calculated by OPM. ID at 4.
¶8 OPM has timely petitioned for review. Petition for Review (PFR) File,
Tab 1. In its petition, OPM asserts that, although the administrative judge was
correct that it miscalculated the number of months the appellant was overpaid, he
erred in finding that the monthly rates that OPM reported also contained errors.
Id. at 6. Specifically, OPM asserts that, in computing the monthly rates, the
administrative judge failed to take into account 5 U.S.C. §§ 8415, 8452(d)(1),
which generally provides that, if the calculation under 5 U.S.C. § 8452 for a
disability annuity rate is less than the computation of the appellant’s earned
annuity rate under 5 U.S.C. § 8415, then OPM must pay the appellant the earned
annuity rate. Id. Thus, OPM asserts that it correctly calculated the appellant’s
disability rate for the period in question as $841 per month. 3 Id. OPM therefore
asserts that the Board should reverse the initial decision to the extent that it
forecloses the recovery of the $20,505 overpayment. Id. OPM notes that this
amount is less than the amount it should have alleged that the appellant was
overpaid, but asserts that this is the amount certain that it has established on
appeal. 4 Id. The appellant filed an untimely motion for an extension of time to
3
On petition for review, OPM states that it calculated the appellant’s monthly annuity
rate as follows: $49,648 (appellant’s average annual salary) x 20.75 (retirement factor
reflecting the appellant’s 20 years and 9 months of service) x 1% (appellant’s earned
rate under 5 U.S.C. § 8415) x .98 (appellant’s part-time proration factor consistent with
5 U.S.C. § 8415(g)(1)(B)) = $10,095 ÷ 12 months = $841 (appellant’s new monthly
rate). PFR File, Tab 1 at 11 n.3.
4
OPM states that it should have alleged an overpayment of $30,261. PFR File, Tab 1
at 12. This figure is based on the calculation that the appellant was paid a total of
$51,286 (($2,482 (appellant’s old monthly rate at 60% of her average pay) x 12 months
(from April 2009 through March 2010)) + ($1,654 (appellant’s old monthly rate at 40%
of her average pay) x 13 months (from April 2010 through April 2011)), but should
have been paid a total of $21,025 ($841 (appellant’s new monthly rate or earned annuity
rate) x 25 months (from April 2009 through April 2011)). Id.
6
file a response. PFR File, Tab 5. The Clerk of the Board denied the appellant’s
motion. 5 PFR File, Tab 6 (citing 5 C.F.R. § 1201.114(f),(g)).
ANALYSIS
¶9 OPM bears the burden of proving the existence and amount of an annuity
overpayment by preponderant evidence. 6 Vojas v. Office of Personnel
Management, 115 M.S.P.R. 502, ¶ 10 (2011); 5 C.F.R. § 845.307(a). Where the
Board cannot determine on the record before it whether the annuitant received an
overpayment in the amount asserted, but where OPM’s evidence, if clarified
through additional explanatory material, could establish the existence and amount
of the overpayment, the Board may remand the appeal to provide OPM the
opportunity to clarify its evidence. See Cohron v. Office of Personnel
Management, 96 M.S.P.R. 466, ¶¶ 22-23 (2004).
¶10 OPM failed to explain below that, pursuant to 5 U.S.C. § 8452(d)(1), its
calculation of the appellant’s new annuity rate was based upon her earned annuity
rate. On petition for review, OPM asserts that, in calculating the appellant’s
earned annuity rate, it relied on an average salary of $49,648, service of 20 years
and 9 months, and a .98 part-time proration factor. PFR File, Tab 1 at 11.
5
Subsequently, the appellant filed a response in which her representative stated that his
motion was untimely because he was not informed that OPM filed a petition for review
until the day before he filed the motion for an extension of time. PFR File, Tab 5. We
do not accept the appellant’s untimely motion and untimely response because the
document distribution log for the Board’s e-Appeal Online System indicates that the
petition for review was distributed to the registered e-filers in this matter on June 11,
2015, and the petition for review acknowledgment letter was distributed to the
registered e-filers in this matter on June 15, 2015. PFR File, Tabs 1-2. Additionally, as
a registered e-filer, the appellant’s representative was responsible for monitoring case
activity on the e-Appeal Online Repository to ensure that he received all case-related
documents and for ensuring that email from @mspb.gov was not blocked by filters. See
IAF, Tab 8; 5 C.F.R. § 1201.14 (j)(2)-(3). However, on remand, the appellant will have
the opportunity to respond to OPM’s assertions.
6
A preponderance of the evidence is that degree of relevant evidence that a reasonable
person, considering the record as a whole, would accept as sufficient to find that a
contested fact is more likely to be true than untrue. 5 C.F.R. § 1201.4(q).
7
However, based upon our review of the appellant’s individual retirement record,
we cannot easily discern how OPM calculated these figures. This is particularly
true because the appellant’s work history included part-time employment, leave
without pay, and receipt of Office of Workers’ Compensation Programs benefits.
IAF, Tab 4 at 33-37. Thus, even if we consider OPM’s explanations offered for
the first time on review, we cannot determine whether OPM has proven an
amount certain that the appellant received in overpayment. We therefore remand
the appeal for additional clarification by OPM. See Cohron, 96 M.S.P.R. 466,
¶ 23. On remand, the administrative judge should direct OPM to submit
additional evidence and argument regarding how it calculated the overpayment
and the appellant should be afforded an opportunity to present additional
evidence and argument in response to any submission by OPM. Id. The
administrative judge shall convene another hearing if requested by the appellant.
Id.
¶11 To the extent that the appellant now raises the issue of waiver of any
overpayment and the adjustment of any repayment schedule, the Board does not
have jurisdiction over these issues because OPM did not issue a final
reconsideration decision regarding them. See Godbout v. Office of Personnel
Management, 466 F.3d 1375, 1379 (Fed. Cir. 2006) (finding that, because OPM
did not discuss the issue of waiver of the overpayment in its reconsideration
decision, the Board could not reach the issue). Therefore, if the administrative
judge finds that OPM has proven an amount certain in overpayment, he should
remand the appeal to OPM for issuance of a reconsideration decision regarding
the issue of waiver of the overpayment, and, if applicable, the adjustment of a
repayment schedule.
8
ORDER
¶12 For the reasons discussed above, we REMAND this case to the field office
for further adjudication in accordance with this Remand Order.
FOR THE BOARD: ______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.