Prestonback v. United States

OR|G|NAL

United States Court of Federal Claims

No. 17-439 C

Filcd; Augusr 30, 2018 F | L E D

3 AUG 3 0" 2013

LOGAN B. PRESTONBACK, )

) U`SE FE£LU§LTA?JS

. . FED

Plal““ff’ § RCFC 52.1; Judgmem en the

V ) Administrative Record

` ) Military Pay; Voluntarily Fail;

THE UNITED STATES, ) Entltlement Recoupment

)

Defendant. )

)

Logan B. Prestonback, Manhattan, KS, proceeding pro se.

Dam`el S. Herzféld, United States Department of Justice, Civil Divisicn, Washington, DC, for

defendant.

OPINION AND ORDER

SMITH, Senior Judge

This action is before the Court on defendant’s Motion for Judgment on the

Administrative Record. On March 28, 2017, plaintiff, Logan Prestonback, filed his Complaint

with this Court, alleging that he Was wrongfully separated from the United States Army

(“Army”). See generally Complaint (hereinafter “Compl.”). Plaintiff seeks various forms of

relief, including the following: “a monetary refund of $7,00() withheld from his 2014 tax”

refund; “a judgment and decree setting aside” the Defense Finance and Accounting Service’s

(“DFAS”) recoupment action against piaintiff; and “a stay of any further prosecution of such

action by [DFAS] until the Court issues its final judgment and decree.” Compl. at 4. For the

following reasons, the Court grants defendant’s Motion for Judgrnent on the Administrative

Record.

I. Background

Logan Prestonback served in the Army from l\/Iay 23, 2009, until his honorable discharge

at the rank of First Lieutenant (“lLT”) on June 27, 2013. Administrative Record (hereinafter

“AR”) 18. ln 2005, as part of the commissioning process at the United States Military Acadcmy

in West Point, New York, lLT Prestonback signed his Service Agreement (“Form 5-50”),

consenting to serve on active duty for five years AR 56. Form 5-50 stipulated that, if lLT

Prestonback “voluntarily fail[ed] or because of misconduct fail[ed] to complete the period of

active duty service,” he Would be required to repay a proportional amount of his educational

scholarship AR 57.

After conimissioning as a Second lieutenant in 2009, lLT Prestonback completed the

Army Engineer Basic Officer Leadership Course and began to serve at Foi't Riley, Kansas, Where

he received a positive Officer Evaluation Report (“OER”). AR 49. OERs allow for Army

leaders to assess and rate the quality and competency of subordinates, and serve as the

administrative basis for promotions or eliminations. AR 48-49‘, see also Of#cer Evaluaiion

Reporrfng Sysi‘em, Army Regulation 623-105, para. l-S (April 1998). Plaintiff was then

deployed to lraq from Novernher 4, 2010 to November 7, 201l, and he was promoted to lL'l`

while overseas. AR 46.

ln 20l 1J lLT Prestonback received a negative, or “referred,” OER, which stated that

plaintiff “failed to follow direct lawful orders” and “only [did] specific tasl<s, often not

completing them to standard.” AR 45-46. lL'l` Prestonback’s comments verifying the OER’s

accuracy were included with the report. AR 47. ln 2012, plaintiff received a second referred

OER, which found “no drive or motivation within LT Prestonbacl<, which he freely admits.” AR

41-42. Plaintiff’s senior rater placed him last of the seventeen First Lieutenants assessed, stating

that lL'l` Prestonbaclc’s “lackluster performance while deployed was a burden.” AR 42. On

March l9, 2012, plaintiff responded to the second referred OER, rebutting the assessment and

highlighting his improvement AR 43-44.

On Deccmbcr l4, 2012, the Army Human Rescurces Command (“HRC”) initiated 1LT

Prestonback’s administrative separation based on “substandard duty performance,” and directed

plaintiff to show cause why he should not be eliminated AR 33-34. On February 5 , 2013, lLT

Prestonhack responded, stating that the referred OERs were based on “opinion and absent any

reason.” AR 3l. On May 22, 2013, the Deputy Assistant Secretary of the Army for Review

Boards (“Deputy Secretary”) determined that llfl` Prestonback should be separated from the

Army for “substandard duty performance.” AR 22. The Deputy Secretary also stated that “a

recoupment action would he conducted in accordance with Army Regulation 600-8-24 and 10

U.S.C. § 2005.” AR 22. On June 27, 2013, the Army discharged 1LT Prestonbacl<. AR lS.

On September 13, 2013, DFAS informed ILT Prestonbacl< that he owed $30,352.01 for

the balance of his educational scholarship AR 12-13. On October 21, 2013, lL'l` Prestonback

filed an Application for Correction of Military Record (“Application”) with the Army Board for

Correction of Military Rccords (“the Board”), requesting that the Board waive his educational

debt. AR 16. Plaintiff argued that the recoupment action was improper because he was

eliminated for reasons other than those specifically listed in Form 5-50. AR 3, 9.

lLT Prestonback filed his Application with the Board on Octoher 21, 2013. AR 16. On

Fehruary 20, 2014, the Board directed plaintiff to provide supplemental documentation AR 15.

After considering plaintiffs amended Application, the Board denied his waiver request on

Fchruary 5, 2015. AR 3, 7-8. The Board found that plaintiff was “eliminated from the U.S.

Army because of substandard duty performance.” AR 8. The Board determined that lL'l`

l’restonbacl<’s substandard performance fell within the scope of Form 5-50’s “voluntarily fail.”

AR 3, 57.

On March 28, 2017, lLT Prestcnbacl< filed his Complaint with this Court, alleging that

he “cannot be liable for [schoiarship] reimbursement because [hel was not terminated for

misconduct, nor did he voluntarily resign,” in accordance with Form 5~50’s two expressly stated

categories for termination Compl. at 2. On October 6, 2017, the government filed its Motion

for Judgment on the Administrative Reccrd, arguing, inter alia, that plaintiff’s elimination fell

within the scope of Form 5~50, and that the Board’s decision was reasonable Defendant’s

Motion for Judgement on the Administrative Record (hereinafter “D’s MJAR”) at 15. On March

7, 2018, the Court dismissed plaintiffs Complaint, Without prejudice, for failure to prcsecute, in

accordance with RCFC 41(b). Order, ECF No. 17-439, Dkt. No. 22.

On l\/Iarch 20, 2018, the Court vacated its dismissal in accordance with RCFC 60, finding

that reopening the case was in the interest ofjustice, and accepted plaintiff’ s Response to

defendant’s Motion for ludgment on the Administrative Record. Order, ECF No. l7~439, l)kt.

No. 24; tree generally Plaintiff’ s Response tO l\/lotion for Judgment on the Record (hereinafter

“P’s Resp.”). ln his Response, ll,"l` Prestonbacl< argues, inter alia, that the Army failed to

provide adequate notice of elimination or recoupment, and that Form 5-50 should be analyzed

under common law contract principles P’s Resp. at 5~6. Plaintiff also asks for a ruling of

summary judgment based on the Administrative Record and the parties’ motions Id. at 10

(citing Rule 56(a) of the Rules of the Court of Federal Claims; Anclerson v. Ll'berly Lol)by, Inc.,

47? U.S. 242, 248 (l 986) (noting that a material fact is one that “might affect the outcome of the

suit.”)). On l\/lay 10, 2018 the government filed its Reply in Support of its Motion for ludgment

on the Administrative Record. See Defendant’s Reply in Support of its Motion for Judgment on

the Administrative Record (hereinafter “D’s Reply”). In its Reply, defendant argues that

statutory law governs Form 5-50, and that the Federal Circuit’s understanding of “voluntarily

fail” includes substandard performance D’s Reply at 3, 6.

As pro se plaintiffs are, by their nature, unassisted, this Court may sometimes grant a pro

se plaintiff greater lenience throughout the filing process ln keeping with this permissive

ieniency, the Court construes plaintist Response, in which he asks for Summary Judgment, as a

Cross-l\/Iotion for judgment on the administrative record P’s Resp. at 10. Had plaintiff wished

to file a Reply, it would have been due on May 17, 20l8. RCFC 20(b)(2). As the Court has not

received such an optional Reply, the case is considered fully briefed and ripe for review.

II. Standard of Review

This Couit’s jurisdictional grant is primarily defined by the Tucl<er Act, which provides

this Court the power “to render any judgment upon any claim against the United States founded

either upon the Constitution, or any Act of Congress or any regulation of an executive

department, or upon any express or implied contract with the United States . . . in cases net

sounding in tort.” 28 U.S.C. § l491(a)(1) (2012) (emphasis added). Although the Tuel<er Act

expressly waives the sovereign immunity of the United States against such claims, it “does not

create any substantive right enforceable against the United States for money damages.” United

Slaies v. Tesmn, 424 U.S. 392, 398 (1976). Rather, in order to fall within the scope of the

Tucker Act, “a plaintiff must identify a separate source of substantive law that creates the right to

money damages.” Fisher v. United Stares, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc in

relevant part).

The Court reviews decisions of military correction boards based upon the Administrative

Record. Walls v. United Slates, 582 F.3d 1358, l367 (Fed. Cir. 2009). When a party requests

judgment on the Administrative Record under RCFC 52.1, the Court makes findings of fact as if

it were conducting a trial on a paper record. Barrnum, line v. United Smtes, 404 F.3d 1346, 1354

(I*`ed. Cir. 2005). Lool<ing to the Administrative Record, the Court must determine whether a

party has met its burden of proof based on the evidence in the record. Id. at 1355.

'l`here is a deferential Standard When reviewing military personnel decisions, and this

Court “will not disturb the decision of the corrections board unless it is arbitrary, capricious,

contrary to law, or unsupported by substantial evidence.” Chambers v. United Sfares, 4l7 F.3d

1218, 1227 (Fed. Cir. 2005) (citing Haselrig v. United Smtes, 333 F.3d 1354, 1355 (Fed. Cir.

2003)). Further, the Court may not “substitute [its} judgment for that of the military departments

when reasonable minds could reach different conclusions on the same evidence.” Helslg v.

United States, 719 P`.2d 1l53, l156 (Fed. Cir. 1983). Finally, the plaintiff must overcome the

presumption of regularity which attaches to actions of the military and military records

correction boards. Armslrong v. United Slates, 205 Ct. Cl. 754, 762-63 (1974) (noting that

“l`p]resumption favors the validity of official military acts,” including those of a military records

correction board, absent evidence to the contrary) (citations omitted).

lII. Discussion

A. Statutory Rights and Contract Principles

Defendant argues that the Board’s decision was reasonablc, as plaintiffs “substandard

performance constituted a voluntary failure” pursuant to the terms of Form 5-50. D’s MJAR at

15. Plaintiff attempts to circumvent the Board’s decision, and argues that, because he signed

Form 5-50 as a contract, the Court should analyze the recoupment action according to common

law contract principles P’s Resp. at 6; AR 56-57. ln response, defendant posits that the Court

should review the Administrative Record, including the Board’s decision, in line with the

Administrative Procedure Act. D’s Reply at 2 (referencing 5 U.S.C. § 500).

This Court predominantly adopts a deferential posture toward military personnel actions

Chanil)ers, 417 F.3d at 1227; /lrmstrong, 205 Ct. Cl. at 762-63; Walls, 582 F.3d at 1367. As

defendant notes, once plaintiff appealed to the Board, its decision became part of the

Administrative Record, and the Court cannot ignore the Board’s decision D’s Reply at 2 (citing

Metz v. United Slales, 466 F`3d 99l, 998 (Fed. Cir. 2006)); AR 3. As such, this Court agrees

with the government’s position and must review plaintiff s case in accordance with the

Administrative Procedure Act.

Precedent dictates that agreements memorialized by documents such as Form 5-50, which

entitle service members to compensation, rest upon a statutory right, and therefore should not be

analyzed according to common law contract principles Schz'sm v. United Sfczres, 316 F.3d 1259,

1272 (Fed. Cir. 2002) (en banc); United Slares v. Larz'onq]j”, 431 U.S. 864, 869 (1977); Bell v.

United Sl'ales, 366 U.S. 393, 401, (196l). This Court reviews scholarship agreements according

to these well settled principles Kennecly v. United Sta.tes, 124 Fed. Cl. 309, 324 (2015) (“'l`he

scholarship agreement upon which plaintiff relies is not. . .an independently enforceable

contract.”), rev ’d on other grounds, 845 F.3d l376, 1381 (Fed. Circ. 2017) (“The Court of

Fedcral Claims found that it lacked jurisdiction to entertain 1\/[1‘. Kennedy’s first three contact~

based claims. i\/[r. Kennedy does not appeal that r‘uling, and we thus need not consider those

claims.”). At present, this Court will not deviate from that well established precedent

B. Form 5-50 and “Voluntarily Fail”

ln its l\/lotion, defendant argues that the terms of Form 5-50 were not exclusive, and

therefore the Board reasonably characterized an involuntary separation for substandard

performance as a “voluntary faillure].” D’s l\/lJAR at 20 (referencing AR 8). lLT Prestonback

contends that financial recoupment was proper only in the event of his willful resignation or

engagement of misconduct, as those were the only enumerated justifications for termination in

Form 5-50. P’s Resp. at 8~9 (citing AR 56). Plaintiff further argues that, because none of the

terms within For'm 5-50 expressly apply to his separation, granting the governrnent’s Motion for

Judgment on the Administrative Record Would require the Court to infer an unreasonable

meaning from either “voluntary” or “misconduct.” Icl. at 9-10. However, the Courts have

previously held that the term “voluntarily failed” can extend to actions other than a soldier’s

willful resignation from the militaryl See e.g. Favreau v. United Srares, 317 F.3d l346, 1360

(Fed. Cir. 2002).

The relevant section of Form 5-50 reads, in part, “the term ‘voluntarily fail’ includes, but

is not limited to.” AR 56. The Court interprets this language to mean that the factors listed were

not exhaustive Both plaintiff and defendant acknowledge that the parameters of Form 5-50

were “non~exclusive.” D’s Reply at 2 ; P’s Resp. at 8. The non-exclusive nature of Form 5-50’s

criteria indicates that the Ar‘my could potentially terminate a service member for reasons not

expressly listed. As such, factors not expressly listed in For‘m 5-50 can be used as a basis of

recoupment See e.g. Favreau 317 F.3d at 1360.

Additionally, defendant asserts that, because the plaintiff s voluntary actions prompted

his involuntary separation, such separation should be construed as “voluntarily fail[ingj” under

Form 5~50. D’s l\/IJAR at 18 (citing Favreau 317 F.3d at 1357-58). Plaintiff argues that, if the

Army had intended to include involuntary termination for substandard performance within the

scope of “voluntarily fail,” such language would have been expressed in Form 5-50. P’s Resp. at

9. The reasonableness of the Board’s decision turns on whether the Board properly understood

“voluntarily fail” to include willful actions leading to an involuntary separation, and not as an

overall intent to leave the Army.

Looking to legislative and legal history, this Court is persuaded that “voluntarily fail”

reasonably includes willful actions leading to an involuntary separation The statutory

framework provides that failure to complete the prescribed term of active duty or failure to

“fulfill any term or condition prescribed pursuant to . . . such other terms and conditions as the

Sccretary concerned may prescribe to protect the interest of the United States” shall trigger

repayment actions. 10 U.S.C. §2005 (a)(3)-(4) (2017). The corresponding statutory repayment

provisions state that a service member who fails to °‘satisfy certain eligibility requirements” will

repay “an equal amount lofj the unearned portion of the bonus or similar benefit” or “any

unearned portion of the bonus, incentive pay, or similar benefit.” 37 U.S.C. §§303(€)(1)(A)

(2011), 373(a) (2009). The applicable r‘egulation, which contains those terms and conditions,

states that substandard performance could lead to an involuntary termination from the armed

forces. Officer Tronsfers & Dischcrrges, Army Regulation 600-8-24, par‘a. 4-2 (Feb. 24 2005).

'l`his Court has long held that a failure to maintain physical standards can qualify as a

voluntary fail that can trigger a recoupment action. Favreau 3 l7 F.3d at l360. lt seems

reasonable to this Court that the Board could view performance standards in a similar manner to

physical standards Therefore, lLT Pr‘estonback’s referred OERs could reasonably be

interpreted as a voluntary failure to fulfill the terms of his service requirement in violation of

Form 5-50, which in turn triggered an involuntary separation ripe for recoupment actions As

such, this Court finds that the Board reasonably concluded that plaintiffs involuntary

termination for substandard performance fell within the terms of Form 5-50. lt follows that it

was neither arbitrary, capricious, nor contrary to law for the Board to deny plaintiffs recoupment

waiver requestl

C. Agerrcy and Notice

ln his Complaint, lLT Prestonbacl< claims that a representative ofDFAS conveyed that

he would not be subject to recoupment action for his educational debt. Cornpl. at 3. Plaintiff

implies the Board’s decision was unreasonable because it conflicted with this assurance

Defendant argues that the DFAS employee was not a proper agent with authority to make those

guarantees, and, therefore, those representations were not binding D’s MJAR at 21-22 (citing

Perez v. United Smres, l56 F.3d l366, 1373 (Fed. Cir. 1998) (refusing to credit “erroneous

advice” to a service member from an unauthorized agent); Fed Crop Ins. Corp. v. Merrill, 332

U,S. 380, 384 (1947)).

Defendant argues that the “Secretary concerned” is empowered to set the terms and

conditions for education assistance, including recoupment 10 U.S.C. §2005 (a)(3)-(4) (201'7).

Defendant contends that the Deputy Secretary, as the designee of the Secretary of the Army, is

the empowered authority, and, as such, the Deputy Secretary’s decision to separate plaintiff for

his referred OERs is binding D’s MJAR at 20-2l (citing Fecl Crop InS. Corp., 332 U.S. at 384;

10 U.S.C. § 2005(a) (2017)). Plaintiff disagrees, arguing that the DFAS employee making such

assertions “appeared to be no less authorized . .as any other Army civilian” to speak on behalf of

the Agency. P’s Resp. at 3.

Looking to the Administrative Record as a whole, this Court finds that the issue of

agency had no impact on the Board’s decision to deny plaintiffs request for a recoupment

waiver. The relevant statute is clear that the ‘°Secretary concerned” shall enforce the statute, and

the Secretary of the Army did so through the Deputy Secretary’s actions. 10 U.S.C. § 2005(a)

(2017). lnformal assurances from a DFAS employee do not supplant the Deputy Secretary’s

authority.

ln his Complaint, lLT Prestonback also alleges the Board’s decision was unreasonable,

as he was not given proper notice of the Agency’s recoupment action. Compl. at 3. Plaintiff

contends that he was never notified about the recoupment action during the pendency of his

separation process, pointing to his OERs, the December 14, 2012 Show Cause Memorandum,

and the recommendations from his chain of command to support his proposition P’s Resp. at

3-4 (referencing AR at 26-28, 30, 33-35, 38-42, 45~46, 48-50). Defendant maintains that the

terms of Form 5-50 constituted proper notice that his involuntary separation could result in

recoupment action. D’s MJAR at 15; D’s Reply at 7.

'l`his Court agrees with defendant’s position. The language of Form 5'50, which stated

that if he “voluntarily fail[ed]” to complete his service requirement 1LT Prestonback would

“reimburse the United States” for the unearned portion of his scholarship, constituted proper

notice of recoupment See AR 56. Additionally, the Army explicitly cited Army Regulation

600»8-24, “Officer Transfers and Discharges,” in its December 14, 2012 memo titled “lnitiation

of Elimination.” See Army Regulation 600-8-24; AR 33-34. Plaintiff responded to that memo,

see AR 31-32, which indicates to this Court that lLT Prestonback understood that he was subject

to the terms of that regulation The Court is persuaded that plaintiff received sufficient notice

that “voluntarily fail[ing]" to complete his service requirement would result in an involuntary

separation and ensuing recoupment As such, the Board’s decision was reasonable

IV. Conclusion

For the reasons set forth above, defendant’s MOTION for Judgment on the

Administrative Record is GRANTED. Plaintiffs Rcsponse, which this Court interprets as a

CROSS-MOTION for Judgment on the Administrative Record, is DENIED. 'l` he Clerk is

directed to enter judgment in favor of defendant, consistent with this opinion.

IT IS SO ORDERED. % : :

/ ' /

FLoren A. Sinith, Senior Judge