Clouse v. Office of Pers. Mgmt.
| Decision Date | 21 February 2023 |
| Docket Number | PH-0841-20-0146-I-2 |
| Parties | JENNIFER W. CLOUSE, Appellant, v. OFFICE OF PERSONNEL MANAGEMENT, Agency, and GRACIELA CLOUSE, Intervenor. |
| Court | Merit Systems Protection Board |
THIS FINAL ORDER IS NONPRECEDENTIAL[1]
Charles P. Lamasa, Esquire, Baltimore, Maryland, for the appellant.
Jane Bancroft, Washington, D.C., for the agency.
¶1 The appellant has filed a petition for review of the initial decision, which affirmed the final decision of the Office of Personnel Management (OPM). For the reasons discussed below we GRANT the appellant's petition for review and VACATE the initial decision. We ORDER OPM to cancel its final decision establishing a 46-month repayment schedule and to pay the appellant the remaining benefits she is owed of the $18,789.60 underpayment that accrued between July 1, 2016 and July 30, 2019.
¶2 The facts in this case are not disputed. On May 8, 2001, the appellant, a former Federal employee, and her husband divorced. Clouse v. Office of Personnel Management, MSPB Docket No. PH-0841-20-0146-I-1, Initial Appeal File (IAF), Tab 9 at 14-17. On June 30, 2016, the appellant retired under the Federal Employee Retirement System (FERS).[2] Id. at 18, 25. As a condition of the divorce, the parties stipulated that "the parties' Federal Employee Retirement Pensions" would be split in half for all months of creditable service during their marriage. Id. at 15. By court order, the Circuit Court for Baltimore County, Maryland directed OPM "to pay Former Spouse's share directly to Former Spouse." Id. at 10 (capitalization in original).
¶3 However, OPM initially miscalculated the annuity payments to the appellant's former spouse, resulting in an overpayment to the former spouse and an underpayment to the appellant. IAF, Tab 1 at 8-9. On or about May 2016, the appellant notified OPM of the error, and OPM ultimately agreed to take action in 2019. IAF, Tab 1 at 8, Tab 9 at 7. On January 1, 2020, OPM issued a final decision stating that the appellant had "been underpaid $18,789.60 from July 1, 2016 to July 30, 2019" and that the appellant "will receive this amount, in 98 monthly installments of $190.00 with a final installment of $169.60." IAF, Tab 1 at 9-10. OPM reasoned that it would refund the underpayment according to the same schedule it used to collect its corresponding overpayment to the appellant's former spouse. Clouse v. Office of Personnel Management, MSPB Docket No. PH-0841-20-0146-I-2, Appeal File (I-2 AF), Tab 24 at 4.
¶4 The appellant filed a Board appeal challenging OPM's January 1, 2020 decision. IAF, Tab 1 at 5, 9-10. On May 8, 2021, while the appeal was pending before the administrative judge, OPM issued an amended award letter notifying the appellant that her "former spouse ha[d] agreed to increase [the appellant's] monthly reimbursement payments" and that she "will receive the remaining balance of $14,539.60 in 45 monthly installments of $320.00 with a final installment of $139.60." I-2 AF, Tab 16 at 4-5.
¶5 After holding the appellant's requested hearing, the administrative judge issued an initial decision affirming OPM's final decision to pay the appellant the underpayment in 45 monthly installments and one final installment. IAF, Tab 1 at 2; I-2 AF, Tab 20, Tab 27, Initial Decision (ID) at 2, 10. In so finding, the administrative judge declined to frame the issue as one of harmful error by OPM. ID at 7. Instead, he found, in essence, that the Board lacks jurisdiction over the repayment schedule because "there is no OPM rule or regulation which would authorize OPM to pay the appellant the money she is owed in a single lump-sum payment." ID at 9. The administrative judge also found premature the appellant's argument that OPM may not refund her in full if the appellant's former spouse were to pass away before all the payments were made. ID at 9-10. He suggested that if that eventually occurs, the Board might then have jurisdiction over OPM's refusal to pay any remaining amount due. ID at 10.
¶6 The appellant has filed a petition for review of the initial decision. Clouse v. Office of Personnel Management, MSPB Docket No. PH-0841-20-0146-I-2, Petition for Review (PFR) File, Tab 1. She argues that the Board has jurisdiction over all of the claims raised in her appeal regardless of the lack of any specific OPM rule or regulation on underpayments because it involves OPM's implementation of a court order affecting her rights and interests under Federal retirement laws. Id. at 5-7, 9-10. She asserts that because the Board has jurisdiction over her appeal, it also has jurisdiction to rule on her affirmative defense of harmful error. Id. at 7-9. Lastly, she argues that the administrative judge erred in finding that the appellant's claim that her former spouse may die before she is fully reimbursed was premature and that waiting to adjudicate that issue is not in the interest of justice. Id. at 11-12. The agency has submitted a nonsubstantive response to the petition for review. PFR File, Tab 4.
¶7 The parties here do not dispute the existence or the amount of the appellant's underpayment. IAF, Tab 1 at 8; I-2 AF Tab 24 at 5. OPM also concedes that the court order ordering apportionment of the appellant's retirement annuity between her and her former spouse was clear, specific, and acceptable for processing and, therefore, OPM was responsible for implementing it, pursuant to 5 C.F.R. § 838.121. I-2 AF, Tab 24 at 5. Thus, the central issue in this appeal is whether the Board has the authority to order OPM to adjust its payment schedule. PFR File, Tab 1 at 5-6, 12. We find that it does.
The administrative judge erred in determining that the Board does not have jurisdiction over the appellant's possible entitlement to an adjustment of the repayment schedule.
¶8 On review, the appellant challenges the administrative judge's finding that the Board lacks jurisdiction over the appellant's repayment schedule. ID at 7-9; PFR File. Tab 1 at 5-7. The administrative judge below found that OPM's statutes and regulations do not provide a payment scheme for the payment of arrearages owed to the appellant, nor specifically allow a lump sum payment of the amount she is owed. ID at 9 & n.3. He explained that although OPM has regulations concerning debts owed to the Civil Service Retirement and Disability Fund, no such regulations exist regarding underpayments owed to retirees or annuitants from the Fund; therefore, the Board lacks jurisdiction to order OPM to alter its current payment schedule. Id. We know of no statutory or regulatory provision specifically addressing the authority of the Board to review an adjustment of a repayment schedule based on a debt OPM owes to the annuitant. Nevertheless, we disagree with the administrative judge and find that the Board has jurisdiction over this appeal pursuant to 5 U.S.C. § 8461(e)(1).
¶9 Under 5 U.S.C. § 8461(e)(1), the Board has jurisdiction to review "an administrative action or order affecting the rights or interests of an individual" under FERS.[3] Eller v. Office of Personnel Management, 121 M.S.P.R. 551, ¶ 8 (2014). OPM is statutorily mandated to take such administrative actions, and "shall pay all [FERS] benefits" from the Civil Service Retirement and Disability Fund. 5 U.S.C. §§ 8401(6), 8461(a)-(d). Prior to retirement, FERS-covered employees contribute to the Fund through salary deductions. 5 C.F.R. § 841.504(b), (h). OPM's duties include paying the basic annuity of an eligible retiree. 5 U.S.C. §§ 8412, 8461(a). OPM is also required to pay benefits to a former spouse of an annuitant pursuant to a qualifying court order incident to a divorce decree. 5 U.S.C. § 8467(a)(1).
¶10 There is no dispute that the appellant was entitled to a basic FERS annuity beginning July 1, 2016. IAF, Tab 9 at 18-21, 25. Here, OPM's underpayment to the appellant and overpayment to her former spouse resulted from OPM's error in calculating the apportionment of the appellant's retirement annuity pursuant to a court order that was incident to their divorce decree. IAF, Tab 1 at 9-10, Tab 9 at 15. Thus, OPM's action affected the appellant's rights and interests under FERS and is subject to the Board's jurisdiction. See Miller v. Office of Personnel Management, 99 M.S.P.R. 104, ¶¶ 8-12 (2005) (), aff'd, 449 F.3d 1374 (Fed. Cir. 2006).
¶11 Moreover, the Board has held that, if an appellant is continuing to receive CSRS or FERS annuity benefits, a reduction in that annuity to recover an overpayment would also affect her rights and interests under the CSRS or FERS and the adjustment of the repayment schedule would be within the Board's jurisdiction. 5 U.S.C. §§ 8347(d)(1), 8461(e)(1); see Martin v. Office of Personnel Management, 119 M.S.P.R. 188, ¶ 9 n.4 (2013); Alexander v. Office of Personnel Management, 114 M.S.P.R. 122, ¶¶ 9-12 (2010) ();[4] 5 C.F.R. § 845.206 (). Here, the appellant is currently receiving an annuity from OPM and seeks to...
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