Mogavero v. McLucas

• Decision Date: 20 October 1976
• Docket Number: Nos. 75-2039,75-2040,s. 75-2039
• Parties: Louis MOGAVERO, Appellant/Cross-Appellee, v. John L. McLUCAS, Secretary of the Air Force, and James R. Schlesinger, Secretary of Defense, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1081

543 F.2d 1081

Louis MOGAVERO, Appellant/Cross-Appellee, v. John L. McLUCAS, Secretary of the Air Force, and James R.

Schlesinger, Secretary of Defense, Appellees.

Nos. 75-2039, 75-2040.

United States Court of Appeals, Fourth Circuit.

Argued May 3, 1976.

Decided Oct. 20, 1976.

Thomas P. Dugan, Fairfax, Va. and Edward F. Sherman, Bloomington, Ind. (Hall, Surovell, Jackson & Colten, Fairfax, Va., on brief), for appellant in 75-2039 and for appellee in 75-2040.

Steven Miller, Capt., USAF, Litigation Div., Washington, D.C. (Rex E. Lee, Asst. Atty. Gen., Washington, D.C., William B. Cummings, U. S. Atty., Alexandria, Va., and Robert E. Kopp, Atty., Civ. Div., Appellate Section, Dept. of Justice, Washington, D.C., on brief), for appellees in 75-2039 and for appellants in 75-2040.

Before WINTER, RUSSELL and WIDENER, Circuit Judges.

WINTER, Circuit Judge:

Louis Mogavero, a former major in the Air Force Reserve, sued to effect reinstatement, back pay and constructive credit toward retirement, on the ground that the Air Force failed to follow its own regulations in making a decision which led directly to his separation from the reserves in 1971. The Air Force conceded that it had not afforded Mogavero the procedure to which he was entitled, but at the same time disputed that Mogavero was entitled to all the procedural rights he claimed. It also asserted the equitable defense of laches, claiming that Mogavero had unreasonably delayed in filing his complaint, and that the delay was prejudicial since it had prolonged the period for which the Air Force might be liable for Mogavero's salary without receiving his services. The district court rejected the defense of laches and found that Air Force regulations entitled Mogavero to all the procedural rights he sought. The Air Force appeals these aspects of the district court's judgment, and we affirm.

The district court, however, denied the requested relief, and instead remanded the case to the Air Force for it to exercise its discretion anew after compliance with the required procedure. Mogavero appeals this aspect of the district court's judgment. While we are in basic agreement with the district court as to the appropriate remedy, we vacate this part of its judgment and remand the case with instructions that it retain jurisdiction of the case pending readjudication by the Air Force, so that it may grant the requested relief should the Air Force determine that Mogavero should not have been discharged.

I

Before proceeding to the facts of Mogavero's case, it is necessary to outline Air Force requirements with respect to reserve officers' rights and obligations to retirement and retirement benefits. Stated in laymen's language, an officer in the reserves may be in active, inactive or retired status. In order to be entitled to retirement benefits, an officer must complete twenty years' service in active status. In order to be in active status, an officer's participation must remain at a certain level, as calculated by a point system. An officer who fails to earn the necessary number of points for a given period is placed in inactive status. Upon the officer's request, and upon evidence of satisfactory participation, the officer is reassigned to active status. However, an officer who has been twice transferred to inactive status for nonparticipation must obtain a "waiver" in order to be reassigned to active status. The granting of a waiver is discretionary with the commander of the Air Reserve Personnel Center. Normally, the commander appoints a board of officers to review requests for waivers and make recommendations to him, which are usually accepted. A request is to be considered only when the officer seeking a waiver has located a vacancy in a reserve unit, and the comments of the commander of that unit have been solicited. Thus, the officer's request can be considered in light of the Air Force's need for his particular skills in a specific position. Waivers are granted when in the "best interest of the Air Force"; however, an officer may request a waiver based on a claimed injustice to himself and is entitled to have the request forwarded to "USAFMPC" at Randolph Air Force Base for consideration. See AFM 35-3 § 10-9.

On March 3, 1968, prior to completing twenty years' active service, Mogavero was assigned to inactive status for the second time. The district court found that in the summer of 1970 Mogavero orally requested a waiver. This finding is not contested on appeal. On August 10, 1970, the request was denied. On May 20, 1971, Mogavero was discharged from the Air Force. He exhausted his administrative remedies by September 16, 1971, when the Air Force Board for the Correction of Military Records denied relief. From August, 1973, until shortly prior to August 12, 1974, when this suit was filed, Mogavero's attorneys were engaged in settlement negotiations with the Air Force.

II

We conclude that, albeit for reasons different from those assigned by it, the district court correctly rejected the Air Force's defense of laches.

As we said in Giddens v. Isbrandtsen Co., 335 F.2d 125, 127 (4 Cir. 1966):

Laches is sustainable only on proof of both of two elements: "(1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense." Costello v. United States, 365 U.S. 265, 282, 81 S.Ct. 534, 543, 5 L.Ed.2d 551 (1961).

In overruling the defense, the district court specifically found the first element present, but held that the second element was missing because the accrual of unearned pay, the only prejudice claimed, was not the sort of prejudice which the defense attempts to prevent. Other courts have reached a contrary conclusion. See, e. g., United States ex rel. Arant v. Lane, 249 U.S. 367, 372, 39 S.Ct. 293, 63 L.Ed. 650 (1919); Brundage v. United States, 504 F.2d 1382 (Ct.Cl.1974), cert. denied, 421 U.S. 998, 95 S.Ct. 2395, 44 L.Ed.2d 665 (1975); Brown v. United States, 418 F.2d 442 (5 Cir. 1970).

We think that the district court's decision is sustainable on the ground that there was not a fatal lack of diligence on Mogavero's part. Thirty-five months elapsed between the time Mogavero exhausted administrative remedies and the date he filed suit. However, Mogavero's attorneys began settlement discussions with the Air Force approximately one year before suit was filed, and there is no suggestion that the case was not pursued with due diligence from that time forward. In the interest of encouraging disputants to settle claims prior to the institution of litigation, we conclude that such a period should not be counted for purposes of laches. Moreover, Mogavero's attorneys' assertion of his claim to a settlement put the Air Force on notice that he thought that his rights had been violated so that if it recognized the merits of his claim it could have been minimized any prejudice that it would sustain after the settlement demand was made. With the period of settlement negotiations excluded, the remaining nineteen-month delay while lengthy, is not fatal under the circumstances of this case. Brundage and Brown are distinguishable on this basis. In Brundage, the delay chargeable to the plaintiff was forty-three months; in Brown, the delay was thirty-two months.

III

The Air Force concedes for purposes of this appeal that Mogavero was not afforded several procedural rights to which he was entitled under AFM 35-3. However, the district court ruled that waiver proceedings are also governed by AFR 11-1, a regulation of general applicability to investigations conducted by boards of officers. The Air Force contends that AFR 11-1 is inapplicable. Its position is that AFR 11-1 applies only to factual "investigations," whereas the function of a waiver board is merely to review a record and make a recommendation. The dispute is one of...