Godbout v. Office of Personnel Management , 466 F.3d 1375 ( 2006 )

United States Court of Appeals for the Federal Circuit
06-3178
RICHARD L. GODBOUT,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
Richard L. Godbout, of Tuscola, Texas, pro se.
Roger A. Hipp, Trial Attorney, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, for respondent. With him on
the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director,
and Bryant G. Snee, Assistant Director. Of counsel on the brief was Paul St. Hillaire,
Attorney, Office of Personnel Management, of Washington, DC.
Appealed from: United States Merit Systems Protection Board
United States Court of Appeals for the Federal Circuit
06-3178
RICHARD L. GODBOUT,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
___________________________
DECIDED: October 25, 2006
___________________________
Before MAYER, RADER, and LINN, Circuit Judges.
Opinion for the court filed by Circuit Judge RADER. Dissenting opinion filed by Circuit
Judge MAYER.
RADER, Circuit Judge.
Mr. Godbout appeals a decision from the Merit Systems Protection Board
(Board) affirming an Office of Personnel Management (OPM) decision to recover
annuity overpayments. See Godbout v. Office of Pers. Mgmt., DA-0845-05-0383-I-1
(Aug. 8, 2005) (Board Decision). The Board affirmed the finding that an overpayment
had occurred and denied Mr. Godbout’s appeal of the overpayment because he did not
request a waiver from OPM. Finding no reversible error, this court affirms.
I.
In its reconsideration decision, OPM determined that it had overpaid Mr. Godbout
$35,820.55 in civil service annuity benefits. Board Decision at 2. OPM announced that
the agency would collect the overpayment by deducting monthly installments from Mr.
Godbout’s Federal Employees’ Retirement System (FERS) annuity payments. Id. at 2-
3.
At the time of his retirement in 1994, Mr. Godbout “indicated on his retirement
application that he was awarded military retired pay ‘for a disability incurred in combat
or caused by an instrumentality of war.’”1 Id. at 2. Based on that declaration, OPM
included his active duty in the computation of his FERS annuity benefits. More than ten
years later, OPM learned from the Military Retired Pay Center that Mr. Godbout’s
disability did not occur in combat or by an instrumentality of war. Id. Accordingly, Mr.
Godbout’s annuity benefits should not have included his active duty years. OPM
requested the information about Mr. Godbout’s disability in 1995. The record on appeal
does not show a reason for the lapse of ten years before recalculation of Mr. Godbout’s
annuity based on the Military Retired Pay Center’s determination.
The Board found that OPM met its burden of proving the overpayment. Id. at 6.
Specifically, the Board determined that the record showed “that OPM received
certification that [Mr. Godbout’s] disability was not incurred in enemy combat or caused
by an instrumentality of wa[r].” Id. Thus, the Board held that Mr. Godbout had received
an overpayment of $35,820.55. Id. The Board further held that appellant had not met
his burden to allow waiver of the overpayment. Id. at 7-8. Finally, the Board
determined that equity and good conscience did not bar recovery of the overpayment.
Id.
1
Mr. Godbout suffers from Meniere’s Syndrome and Disease which arose
because of his military duties as a Section Leader for the Davy Crockett nuclear
weapons system.
06-3178 2
On appeal, Mr. Godbout argues that the overpayment was not his fault and
seeks a waiver. Specifically, he argues that Navy personnel helped him complete his
forms and informed him that his disability qualified for credit because it occurred during
a period of war. Further he asserts the ten years of delay before notifying him of an
overpayment absolves him of responsibility.
In response, the Government argues that Mr. Godbout did not properly request a
waiver. Mr. Godbout admits that he did not check the box to request reconsideration by
OPM. Moreover, he did not complete the necessary financial questionnaire for
assessment of the waiver. Thus, the Government argues, the Board should never have
considered Mr. Godbout’s waiver request, nor should it be considered on appeal.
II.
This court may reverse a decision of the Board only if the decision is arbitrary,
capricious, an abuse of discretion, or unlawful; procedurally deficient; or unsupported by
substantial evidence. 5 U.S.C § 7703(c); Hayes v. Dep’t of Navy, 727 F.2d 1535, 1537
(Fed. Cir. 1984).
This court finds no reason on appeal to disturb the Board's decision that OPM
met its burden of proving an overpayment. OPM showed that Mr. Godbout, whose
injury did not occur during wartime, was not entitled to service credit for his military
service. Therefore, this court affirms the Board’s finding of an overpayment. Board
Decision at 6-7.
Section 8470(b), United States Code, Title 5, governs the Government’s recovery
of overpayments:
06-3178 3
(b) Recovery of payments . . . may not be made from an individual when,
in the judgment of the Office, the individual is without fault and recovery would be
against equity and good conscience.
By its terms, section 8470(b) prohibits any recovery of payments when OPM has
made a finding that an individual is without fault and that recovery would be against
equity and good conscience. The statute is silent, however, as to whether recovery is
permitted when no finding has been made at all, and as to when OPM must seek to
make a finding. To implement this statutory scheme, OPM requires a waiver to trigger
the finding obligation. In other words, without a waiver request, OPM will not undertake
an investigation into fault and equity. Because this practice represents a reasonable
interpretation of a statute within its purview to implement, this court acknowledges and
upholds the OPM trigger requirement. Chevron v. Natural Def. Res. Council Inc., 467
U.S. 837, 844 (1984). Thus, the Government argues, Mr. Godbout is not entitled to a
consideration of waiver of the debt because he did not check the box on the form sent
to him by OPM when he was initially informed that OPM had discovered its
overpayment.
In retort, Mr. Godbout states that he did not check the waiver box because,
based on the definition of “waiver” provided on the form, it would be an
acknowledgement of fault on his part (i.e., that he knew all these years of the
overpayments.) OPM’s form directs an individual to check the waiver box when an
individual acknowledges that an overpayment has been made but seeks to waive an
overpayment. Thus, Mr. Godbout interpreted OPM’s form to mean that a request for
waiver would acknowledge, but seek to avoid responsibility for, an overpayment.
Because Mr. Godbout challenged the occurrence of an overpayment (based on his
06-3178 4
reliance on Navy Human Resources Personnel in completing his annuity forms in the
first place he never realized he was being paid in excess), he did not check the box for
a waiver. Thus, Mr. Godbout requested reconsideration, but not waiver, of the
overpayment.
This court notes that OPM retains the discretion in these circumstances to
undertake a fault and equity finding without a formal waiver request. According to the
Policy Guidelines on the Disposition of Overpayments under the Civil Service
Retirement System and the Federal Employees’ Retirement System, I.A.5, Retirement
and Insurance Service, U.S. Office of Personnel Management (May 1995) (Policy
Guidelines), in a situation such as this, where an “overpayment debtor requests
reconsideration, but not waiver, and in the course of reviewing the reconsideration
request it becomes clear that the debtor is without fault, a pre-request waiver should be
considered and granted if all the conditions for a waiver are fulfilled. If all the conditions
for a waiver are not fulfilled, the reconsideration letter should not address the waiver
issue.” The conditions of waiver are met if OPM determines that the debtor is without
fault and recovery would be against equity. Id., I.A.1. Thus, OPM retains discretion to
waive repayment in some instances without a waiver request. Id., I.A.5. Nonetheless,
the requirement for a waiver to trigger a mandatory finding in the “judgment of the
Office” remains in place. 5 U.S.C. § 8470(b); Policy Guidelines, I.A.5. Unless
specifically requested by the debtor, the Office has no obligation to make fault and
equity findings. Policy Guidelines, I.A.5.
Here, in OPM’s February 18, 2005, letter to Mr. Godbout addressing the
discovery of the overpayment, OPM addresses the entire question neutrally: "An
06-3178 5
overpayment has resulted due to a delay in re-computing your annuity where the non-
creditable military service was excluded from your annuity computation." OPM makes
no finding about fault. Moreover, the initial decision letter also contains no OPM
findings about responsibility for the lengthy delay – a contributing factor in both the fault
and equity decisions.
Later, in its reconsideration decision dated April 14, 2005, OPM identifies that
“the inclusion of military service in the computation of your annuity benefits was
erroneous.” This decision notes that Mr. Godbout “indicated on [his] retirement
application that [he was] awarded military retired pay for a disability incurred in combat.”
Thus, OPM attributes fault to Mr. Godbout in his incorrect annuity application. The
reconsideration decision did not consider or attribute fault to the lengthy delay. The
reconsideration decision is silent about waiver and without a waiver request, OPM does
not formally address waiver in the reconsideration letter. Therefore, either OPM
considered waiver and determined that all the conditions for waiver were not present, or
OPM did not consider the issue of waiver period.
Because OPM did not discuss the issue of waiver in its reconsideration letter the
Board could not reach the question of waiver. In simple terms, waiver was not before
the Board. In its discretion, OPM can weigh the equities without the waiver request. In
the absence of the request, however, Mr. Godbout did not trigger a finding “in the
judgment of the Office” under the statute. Therefore, the Board also could not reach a
finding on waiver. Although the Board purports to affirm OPM’s finding of waiver, this
court determines that OPM did not make such a finding. In practical effect, however,
the Board affirms OPM. This court perceives no reason to disturb that result.
06-3178 6
COSTS
Each party shall bear its own costs.
AFFIRMED
06-3178 7
United States Court of Appeals for the Federal Circuit
06-3178
RICHARD L. GODBOUT,
Petitioner,
v.
OFFICE OF PERSONNEL MANAGEMENT,
Respondent.
MAYER, Circuit Judge, dissenting.
Because 5 U.S.C. § 8470(b) is not ambiguous, and the Office of Personnel
Management (“OPM”) has incorrectly interpreted it, I dissent from the majority’s contrary
view.
Section 8470(b) provides, “Recovery of payments . . . may not be made from an
individual when, in the judgment of the Office, the individual is without fault and recovery
would be against equity and good conscience.” Under OPM’s interpretation of the
statute, a determination about fault and equity occurs only upon a waiver request or at
its discretion. See Ante at 3-5. Accordingly, it invariably does not make a determination
respecting some individuals who are in fact without fault and from whom recovery is
against equity and good conscience, and recovers from them. The statute explicitly
provides, however, that recovery may not be had under these circumstances. The only
way to prevent such recovery, and thereby give meaning to Congress’ intent, is for OPM
to automatically make a determination of fault and equity whenever recovery is sought.
See Lacavera v. Dudas, 441 F.3d 1380, 1383 (Fed. Cir. 2006) (setting forth our analysis
under the Chevron framework). Accordingly, I would send the case back to OPM so it
can conduct the inquiry of fault and equity mandated by section 8470(b).
06-3178 2