Perez v. U.S., 97-5103

• Decision Date: 09 October 1998
• Docket Number: No. 97-5103,97-5103
• Parties: Felix E. PEREZ, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1366

156 F.3d 1366

Felix E. PEREZ, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 97-5103.

United States Court of Appeals, Federal Circuit.

Oct. 9, 1998.

Mark L. Waple, Waple & Associates, of Fayetteville, North Carolina, argued for plaintiff-appellant.

Martin F. Hockey, Jr., Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and James M. Kinsella, Assistant Director. Of counsel on the brief was Major Douglas K. Mickle, Attorney, Office of the Judge Advocate General, Army Litigation Center, Litigaton Division, U.S. Department of the Army, of Arlington, Virginia.

Before RICH, PLAGER, and GAJARSA, Circuit Judges.

PLAGER, Circuit Judge.

This is a military pay case in which Felix E. Perez ("Perez") claims he was wrongfully retired in a rank below that to which he is entitled. In 1981 Perez held a commission in the United States Army Reserves ("Army Reserves"), and was serving on active duty. In 1982, pursuant to legislation eliminating dual-status commissions, and after receiving advice from Department of the Army ("Army") personnel, Perez elected to integrate into the United States Regular Army ("Regular Army"), thereby ending his service in the Army Reserves in which he held the reserve rank of colonel. In 1991 Perez reached mandatory retirement from the Regular Army. On that date, he held the rank of lieutenant colonel and was retired in that rank over his objection. Perez asserted that he should instead be retired as a colonel, based on his holding that reserve rank in 1981. The United States Court of Federal Claims dismissed his complaint pursuant to Rule 12(b)(4) of that court, on the grounds that Perez had failed to state a claim upon which relief can be granted. See 37 Fed. Cl. 764. Because the applicable statute does not entitle Perez to be retired in his prior reserve rank and because his estoppel argument must fail, we affirm the judgment of the Court of Federal Claims.

BACKGROUND

Starting in 1963, Perez was a commissioned officer in the Army Reserves. He was ordered to active duty on March 11, 1963, in the rank of second lieutenant. He continued on active duty for 28 years, during which time he received regular promotions. He retired on March 31, 1991, with the rank of lieutenant colonel.

From 1963 until 1981, Perez was also given a concurrent but separate reserve (inactive duty) rank, also with regular promotions, as was permitted until September 15, 1981. See H.R.Rep. No. 96-1462, at 13 (1980), reprinted As a result, Perez, during the time he was on active duty, was promoted through the "reserve" ranks. Eventually, in June 1981, he was selected for the reserve rank of colonel. He was promoted to that position on September 30, 1981 and assigned a November 28, 1981 date of rank.

                in 1980 U.S.C.C.A.N. 6333, 6344.   These were known as "hip-pocket promotions."   See id.   Prior to September 15, 1981, reserve officers on active duty were able to maintain dual commissions:  an "active-duty" commission and a "reserve" commission.  Separate promotion selection systems were maintained, enabling a reserve officer to hold different ranks in the two systems.  See id
                

Meantime Congress enacted legislation that affected military officer retirement. On December 12, 1980, Congress enacted the Defense Officer Personnel Management Act ("DOPMA"), Pub.L. No. 96-513, 94 Stat. 2835 (codified as amended in scattered sections of 10 U.S.C.). The elimination of dual-status commissions was one stated purpose of DOPMA. See H.R.Rep. No. 96-1462, at 3, 5, 1980 U.S.C.C.A.N. at 6334, 6336. Another provision made more stringent certain requirements for determining the rank of a dual-status officer upon retirement, specifically requiring that the officer have served on active duty in that rank. See Pub.L. No. 96-513, title V, § 502(18), and title I, § 112, 94 Stat. at 2910, 2876 (codified as amended at 10 U.S.C. §§ 3961(a), 1370(a) (1994)).

Pursuant to DOPMA, the Army offered dual-status officers such as Perez the choice of integrating into the Regular Army and continuing on active duty or remaining in the Army Reserves and retiring upon completion of 20 years of service. The Army notified Perez to this effect by letter dated June 16, 1981.

Shortly thereafter, on July 10, 1981, before DOPMA went into effect, Congress made several changes to DOPMA by way of the Defense Officer Personnel Management Act Technical Corrections Act ("DOPMATCA" or "Technical Corrections Act"), Pub.L. No. 97-22, 95 Stat. 124 (codified as amended in scattered sections of 10 U.S.C.). Section 634 of the Technical Corrections Act provided a savings provision which enabled dual-status active-duty Army Reserves officers who retired after the effective date of DOPMA to keep their reserve grade held on September 14, 1981, the day prior to DOPMA and DOPMATCA becoming effective (see 10 U.S.C. § 101 note (1994) (Effective Date of 1980 Amendment)), without meeting the more stringent service-in-rank rule imposed by DOPMA.

This case turns on the construction of the savings provision, which states:

Unless entitled to a higher grade under any other provision of law, a member of the Army or Air Force who is a reserve officer and who--

(1) is on active duty on September 14, 1981; and

(2) after such date retires under section 3911 or 8911 of title 10, United States Code,

is entitled to retire in the reserve grade which he held or to which he had been selected for promotion on September 14, 1981.

DOPMATCA, Pub.L. No. 97-22, § 634, 95 Stat. at 135 (codified at 10 U.S.C. § 611 note (1994) (Savings Provision for Retired Grade of Certain Reserve Officers)) (emphasis added).

The Army's June 16, 1981 letter (sent prior to enactment of DOPMATCA) informed Perez that DOPMA had been enacted and would be implemented on September 15, 1981. The letter further informed Perez that pursuant to DOPMA he was eligible for integration into the Regular Army. The letter explained that if he chose to integrate, he could remain on active duty for 28 years as a Regular Army lieutenant colonel, whereas if he instead remained in the Army Reserves, he would have to retire from active duty upon completion of 20 years of service.

Perez responded by letter dated June 23, 1981. In his letter Perez stated that he was aware of proposed legislation "to 'Grandfather' Reserve Officers on active duty who hold a grade higher than that held on active duty," apparently referring to § 634 of the Technical Corrections Act. Perez explained that he was unable to decide at that time whether to integrate into the Regular Army On July 1, 1981, a Major James T. Cook responded with an official Army postcard, stating in handwriting, "Legislation has passed--your [sic] grandfathered under DOPMA. [Regular Army] integration will not change your retirement status of 06."

because he was uncertain as to whether integration would cause him to forfeit, for retirement purposes, the reserve colonel grade for which he had been selected for promotion. In particular, he inquired as to whether integration would affect his eligibility to retire as a colonel, based on his reserve rank: "In the event I decide to accept integration into the regular Army, am I automatically declining my Reserve's 06 [colonel] grade?"

Shortly thereafter, the Army issued a formal message, published by letter dated July 10, 1981 (which Perez also received), informing of the savings provision provided by § 634 of the Technical Corrections Act. The July 10 letter set forth the text of § 634 and then attempted to explain its effect on dual-status active-duty officers who held a higher reserve rank than their active-duty rank:

Therefore, a reserve officer on active duty (as an officer or enlisted member) on 14 September 1981 and who later retires with more than 20 years active service, 10 of which was as a commissioned officer (10 USC 3911), is entitled to retire in the reserve grade he held or to which he had been selected for promotion on 14 September 1981 (even if he had not served in that grade on active duty). It should be noted that if such an individual is promoted to a higher reserve commissioned grade after 15 September 1981, the active duty requirements of 10 USC 1370, as added by DOPMA, apply.

Prior to DOPMA, a reserve officer could retire from active duty in his reserve grade despite having never served in that grade on active duty. See H.R.Rep. No. 96-1462, at 13, reprinted at 1980 U.S.C.C.A.N. at 6344; H.R.Rep. No. 97-141, at 49 (1981), reprinted at 1981 U.S.C.C.A.N. 24, 49. Under DOPMA, to qualify for retirement in a certain grade, an officer must serve in that grade on active duty for a minimum period of time: three years for voluntary retirement, and six months for involuntary retirement. Pub.L. No. 96-513, title V, § 502(18), and title I, § 112, 94 Stat. at 2910, 2876. The July 10 letter advised dual-status officers that, because of enactment of DOPMATCA with its savings provision in § 634, there was no need to retire prior to DOPMA going into effect to avoid DOPMA's more stringent service requirements.

After receiving the July 1 postcard and the July 10 letter, Perez elected to integrate and was given a commission in the Regular Army on January 25, 1982. Eight years later, in April 1990, the Army notified Perez by letter that he was approaching his mandatory retirement date pursuant to 10 U.S.C. § 633 (1994), based on his 28 years in active service. The letter advised him that he would be retired in the grade of lieutenant colonel. Perez responded with a return letter stating that he was entitled to retire as a colonel. He included as supporting documentation the July 1 postcard he had received from Major Cook.

At the Army's request, the Office of the Judge Advocate General ("JAG") reviewed Perez's case and concluded...