The opinion
UNITED STATES OF AMERICA
MERIT SYSTEMS PROTECTION BOARD
BENJAMIN F. ZANDELL, DOCKET NUMBER
Appellant, SF-831M-14-0128-I-1
v.
OFFICE OF PERSONNEL DATE: October 8, 2014
MANAGEMENT,
Agency.
THIS FINAL ORDER IS NONPRECEDENTIAL 1
Benjamin F. Zandell, Puyallup, Washington, pro se.
Christopher H. Ziebarth, Washington, D.C., for the agency.
BEFORE
Susan Tsui Grundmann, Chairman
Anne M. Wagner, Vice Chairman
Mark A. Robbins, Member
FINAL ORDER
¶1 The appellant has filed a petition for review of the initial decision, which
affirmed the Office of Personnel Management (OPM)’s reconsideration decision
finding that the appellant had received an overpayment of $15,772.63 in civil
service annuity benefits and that he was not entitled to 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A nonprecedential order is one that the Board has determined does not add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 Parties may cite nonprecedential orders,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).
2
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 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. See 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, and
based on the following points and authorities, 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 On November 14, 2013, OPM issued a reconsideration decision affirming
its finding that the appellant was overpaid $15,772.63 in civil service annuity
benefits over a 7-year period. Initial Appeal File (IAF), Tab 7 at 4-5. OPM
explained that, from June 1, 2004, to July 31, 2011, the appellant’s health plan
benefits coverage was erroneously processed under the Blue Cross Blue Shield
“self only” plan, rather than the “self and family” plan. Id. at 4. OPM stated that
because the appellant submitted medical claims and prescriptions for himself and
his spouse during this period, his health benefits premiums became underpaid.
Id. Consequently, the appellant owed additional health benefits premiums,
resulting in an overpayment in civil service annuity benefits of $15,772.63. Id.
In its reconsideration decision, OPM also denied the appellant’s request for a
waiver of the overpayment but adjusted the collection schedule from the original
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63 installments of $250.00 to 90 installments of $175.00 and a final installment of
$22.63. Id. at 5.
¶3 The appellant timely filed an appeal of OPM’s reconsideration decision.
IAF, Tab 1. Thereafter, the administrative judge issued an initial decision on the
written record affirming OPM’s reconsideration decision. 2 IAF, Tab 10, Initial
Decision (ID) at 1, 6. The administrative judge found that OPM established the
existence and amount of the alleged overpayment by preponderant evidence. ID
at 3. He further found that the appellant was not entitled to a waiver of the
overpayment. ID at 3-5. In particular, the administrative judge found that OPM’s
conclusion that the appellant knew or should have known that he was paying the
wrong health benefits premium was reasonable under the circumstances. ID at 3.
He found that, even assuming the appellant was completely without fault in the
creation of the overpayment, the appellant failed to establish that recovery of the
overpayment would be against equity and good conscience. ID at 3-5.
¶4 The appellant has timely filed a petition for review. Petition for Review
(PFR) File, Tab 1. The agency has filed a response to the appellant’s petition.
PFR File, Tab 4.
DISCUSSION OF ARGUMENTS ON REVIEW
¶5 OPM bears the burden of proving the existence and amount of an annuity
overpayment by preponderant evidence. Vojas v. Office of Personnel
Management, 115 M.S.P.R. 502, ¶ 10 (2011); 5 C.F.R. § 845.307(a). The
appellant does not dispute the administrative judge’s finding that OPM
established this burden. 3 Rather, the appellant challenges the administrative
judge’s finding that he was not entitled to a waiver of the overpayment. The
appellant contends that: (1) he was not aware of the error in his deductions
because he did not specifically verify the amount and he had no reason to believe
2
The appellant did not request a hearing. IAF, Tab 1 at 3.
3
In any event, we discern no basis for disturbing this finding on review.
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it was incorrect; (2) OPM’s delay caused the amount of the overpayment to
increase beyond a reasonable amount; and (3) collecting the entire amount of the
overpayment is against equity and good conscience. PFR File, Tab 1 at 4-5.
¶6 The appellant bears the burden of establishing his entitlement to a waiver
by substantial evidence. Knox v. Office of Personnel Management, 107 M.S.P.R.
353, ¶ 5 (2007); 5 C.F.R. § 845.307(b). A waiver may be granted when the
annuitant is without fault and recovery would be against equity and good
conscience. Knox, 107 M.S.P.R. 353, ¶ 5; 5 C.F.R. § 854.301. In determining
fault, pertinent considerations generally include: (1) whether payment resulted
from any statement the appellant should have known to be incorrect; (2) whether
payment resulted from any failure on his part to disclose material facts in his
possession that he should have known to be material; and (3) whether he accepted
a payment that he knew or should have known to be erroneous.
Knox, 107 M.S.P.R. 353, ¶ 6; 5 C.F.R. § 845.302(a).
¶7 We discern no basis for disturbing the administrative judge’s finding that
OPM’s conclusion that the appellant knew or should have known that he was
paying the wrong health benefits premium was reasonable under the
circumstances. ID at 3. OPM stated in its reconsideration decision that, each
year, it mails health benefits information and brochures to annuitants and their
survivors. IAF, Tab 7 at 5. OPM explained that “[t]hese brochures (and
websites) detail the amount of the premiums for self only and self and family
enrollment and provide an opportunity for the annuitant or survivor to make any
changes in their health benefits coverage.” Id. OPM further stated that the health
benefits information it mails annuitants and their survivors includes statements
reflecting deductions made from the monthly annuity benefit. Id. OPM
explained that the appellant could have used the brochures and statements to
compare the amount that should have been charged for the health benefits
premiums with the actual amount that OPM was deducting from his annuity
benefits. Id. The administrative judge found that the appellant did not deny
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receiving this health benefits information and acknowledged that he chose not to
read it. ID at 3. In his petition for review, the appellant acknowledges that he
did not verify the amount he was being charged for his health benefits premiums.
PFR File, Tab 1 at 4. Based on the foregoing, we discern no basis for disturbing
the administrative judge’s finding that OPM’s conclusion that the appellant was
not without fault in creating the overpayment was reasonable. ID at 3.
¶8 Even if the appellant were without fault in creating the overpayment, he has
failed to establish that recovery of the overpayment would be against equity and
good conscience. ID at 3-4. Generally, recovery is against equity and good
conscience when it would cause financial hardship, the annuitant can show that
because of the overpayment he relinquished a valuable right or changed positions
for the worse, or recovery could be unconscionable under the circumstances.
Knox, 107 M.S.P.R. 353, ¶ 8; 5 C.F.R. § 845.303. As noted by the administrative
judge, the appellant does not specifically claim that recovery would cause him
financial hardship nor does he contend that he detrimentally relied on the
overpayment amount such that he relinquished a valuable right or changed
financial positions for the worse. ID at 4.
¶9 Instead, the appellant contends that recovery would be unconscionable
under the circumstances because OPM did not notice its mistake for 7 years. PFR
File, Tab 1 at 4. To determine whether recovery of an overpayment is
unconscionable, the Board considers the totality of the circumstances, taking into
account all of the relevant factors. See Spinella v. Office of Personnel
Management, 109 M.S.P.R. 185, ¶ 7 (2008); see also Aguon v. Office of
Personnel Management, 42 M.S.P.R. 540, 549-51 (1989). The Board’s standard
for finding recovery of an overpayment to be unconscionable is high, and waiver
is justified only in exceptional circumstances. Aguon, 42 M.S.P.R. at 549-51.
Such circumstances may include, but are not limited to, cases in which OPM:
(1) delayed adjustment of an annuity for an exceptionally long period of time;
(2) failed to respond in a reasonable length of time to an annuitant’s inquiries
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regarding an overpayment; (3) failed to expeditiously adjust an annuity after
receiving specific notice; or (4) was grossly negligent in handling a case. Id.
at 550.
¶10 We agree with the administrative judge’s well-reasoned finding that, based
on the circumstances in this case, the appellant has not established that OPM’s
recovery of the overpayment would be unconscionable. ID at 5. In making this
finding, the administrative judge considered the fact that the overpayment in
question accumulated over a 7-year period and that OPM failed to provide an
explanation for the delay. ID at 5. The administrative judge found, however, that
the appellant failed to establish that recovery of the overpayment would be
unconscionable because OPM did not delay once it became aware of the
circumstances that gave rise to the overpayment and because there were no
“additional circumstances” that would militate towards the granting of a waiver.
ID at 5. For example, this is not the type of case in which an employee has
clearly brought OPM’s mistake to its attention and requested correction. ID at 5.
The administrative judge’s finding that the appellant failed to show that OPM’s
recovery of the overpayment would be unconscionable is supported by the weight
of the record evidence and the applicable law, and therefore we discern no reason
to disturb this finding on review. See Crosby v. U.S. Postal Service, 74 M.S.P.R.
98, 106 (1997) (finding no reason to disturb the administrative judge’s findings
where the administrative judge considered the evidence as a whole, drew
appropriate inferences, and made reasoned conclusions); see also Broughton v.
Department of Health & Human Services, 33 M.S.P.R. 357, 359 (1987) (same).
¶11 The administrative judge, therefore, properly found that the appellant failed
to meet his burden of establishing entitlement to a waiver of the overpayment.
Based on the foregoing, we affirm the administrative judge’s initial decision
affirming OPM’s reconsideration decision.
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NOTICE TO THE APPELLANT REGARDING
YOUR FURTHER REVIEW RIGHTS
You have the right to request review of this final decision by the United
States 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 calendar
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 your court
appeal, you may visit our website at http://www.mspb.gov/probono for a list of
attorneys who have expressed interest in providing pro bono representation for
Merit Systems Protection Board appellants before the court. The Merit Systems
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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: ______________________________
William D. Spencer
Clerk of the Board
Washington, D.C.