Simpson v. Office of Personnel Management

• Decision Date: 30 October 2003
• Docket Number: No. 03-3015.,03-3015.
• Citation: 347 F.3d 1361
• Parties: Carole A. SIMPSON, Petitioner, v. OFFICE OF PERSONNEL MANAGEMENT, Respondent.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1361

347 F.3d 1361

Carole A. SIMPSON, Petitioner, v. OFFICE OF PERSONNEL MANAGEMENT, Respondent.

No. 03-3015.

United States Court of Appeals, Federal Circuit.

Decided October 30, 2003.

Diana J. Veilleux, Shaw, Bransford, Veilleux & Roth, P.C., of Washington, DC, argued for petitioner. With her on the brief was Bernard E. Doyle.

Elizabeth Thomas, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent. On the brief were David M. Cohen, Director; James M. Kinsella, Deputy Director; and Kent G. Huntington, Attorney.

Before MICHEL, LOURIE, and DYK, Circuit Judges.

LOURIE, Circuit Judge.

Carole Simpson appeals from the final decision of the Merit Systems Protection Board affirming the Office of Personnel Management's ("OPM's") denial of her application for a survivor annuity. Simpson v. Office of Pers. Mgmt., 92 M.S.P.R. 210, 2002 WL 1906866 (M.S.P.B. 2002) ("Final Decision"). Because we hold that OPM failed as a matter of law to provide adequate notice to Mrs. Simpson's late ex-husband that he needed to take affirmative steps to provide her with a survivor annuity following their divorce, we conclude that the Board erred in finding that Mrs. Simpson is not entitled to receive the annuity. We accordingly reverse and remand for further proceedings consistent with this opinion.

BACKGROUND

Carole and Harold Simpson were married in 1966. Simpson v. Office of Pers. Mgmt., No. PH-0831-00-0273-I-2, slip op. at 3 (M.S.P.B. Apr.26, 2001) ("Initial Decision"). They separated in 1987. Id. Upon his retirement from government service in 1988, Mr. Simpson elected reduced annuity benefits for himself and a survivor benefit for Mrs. Simpson. Id. The couple were divorced in February 1993, amicably by all accounts, id. at 8, and Mr. Simpson continued to receive reduced benefits until his death in June 1994, see Final Decision (Separate Opinion of Member Beth S. Slavet), slip op. at 6 n. 3.

In August 1994, Mrs. Simpson applied for the survivor annuity that Mr. Simpson had elected for her in 1988. Initial Decision, slip op. at 3. OPM denied her application, stating that the election of survivor benefits had automatically terminated upon the couple's divorce, pursuant to 5 U.S.C. § 8339(j)(5)(A),¹ and that Mr. Simpson had neither reelected the survivor benefit within two years of the divorce nor provided for such a benefit in the couple's divorce decree, as required to reinstate the benefits under 5 U.S.C. § 8341(h)(1). Id. at 4.

Mrs. Simpson requested reconsideration, and OPM upheld its decision. Id. Mrs. Simpson appealed to the Board. Id.

Based on an affidavit from Mary Beth Smith-Toomey, the administrator of OPM's contract for printing and distribution of forms and notices, the Board's administrative judge ("AJ") found that OPM had sent standard notices to all annuitants each year from 1989 to 1994 and in 1996,² with information concerning the right of an annuitant to make survivor elections. Id. at 6. According to the AJ, Ms. Smith-Toomey's affidavit satisfied OPM's burden of showing that Mr. Simpson was notified of the need to make an election, and the burden then shifted to Mrs. Simpson to prove that Mr. Simpson did not receive the required notices. Id.

The AJ credited and found persuasive affidavits from several of Mr. Simpson's friends and relatives, all of whom testified that Mr. Simpson would have wanted to elect a survivor benefit for Mrs. Simpson, irrespective of the couple's divorce. Id. at 8. The AJ also credited testimony of Mrs. Simpson and the Simpsons' son that Mr. Simpson had been very careful concerning his financial records, keeping all bills, receipts, payments, and annuity checks for at least the seven years prior to his death, and yet that there was no evidence in his records of his having received a notice requiring reelection of benefits. Id. at 8-9. Nonetheless, the AJ concluded that the petitioner had not met her burden, finding "it equally possible that [Mr.] Simpson provided for his former wife to the extent that he wanted to in [the Separation Agreement and his Last Will and Testament] and that he had no intention of providing a survivor annuity," despite what he told his friends and family; and also that it could be that Mr. Simpson only "kept all of the financial records on those matters upon which he acted, but that he did not keep documents on those matters wherein he took no action." Id. at 9-10.

Mrs. Simpson appealed to the full Board. The Board issued a 1:1 split decision, resulting in affirmance of the AJ's decision. Final Decision, slip op. at 1. This timely appeal followed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).

DISCUSSION

Mrs. Simpson raises three principal arguments on appeal. First, she contends that the government failed to meet its burden of proving that it actually sent the required notice to Mr. Simpson. Second, she argues that the Board erred in finding that the information allegedly provided to Mr. Simpson gave adequate notice that he needed to take affirmative steps to provide her with a survivor annuity following their divorce, notwithstanding his previous election. Finally, Mrs. Simpson asserts that Mr. Simpson's election to provide her with a survivor annuity prior to their divorce became irrevocably restated at the time of his death within the two-year period for making an election. Mrs. Simpson cites Brush v. Office of Personnel Management, 982 F.2d 1554 (Fed.Cir.1992), for the proposition that "[t]he accident of death, before that [statutory] period [for making an election] expired, terminated his ability to yea or nay that election," and, thus, "the election he had made, in writing [at the time of his retirement], ... in fact became irrevocably restated at the time of his death, which was within the two year period." Id. at 1558 n. 11.

The government responds to Mrs. Simpson's first argument by arguing that, under this court's decision in Schoemakers v. Office of Personnel Management, 180 F.3d 1377 (Fed.Cir.1999), Smith-Toomey's affidavit stating that annual notices were sent to all annuitants sufficed to meet the government's burden of establishing that an annual notice was sent to Mr. Simpson during the relevant period, and that the burden then shifted to the annuitant to come forward with evidence that the notice was not received. Id. at 1380-81. According to the government, the Board therefore properly ruled that Mr. Simpson was sent the required notices and that Mrs. Simpson failed to demonstrate that Mr. Simpson had not received them.

In response to Mrs. Simpson's second argument, the government, citing this court's decisions in Holder v. Office of Personnel Management, 47 F.3d 412 (Fed. Cir.1995), Wood v. Office of Personnel Management, 241 F.3d 1364 (Fed.Cir. 2001), and Hairston v. Office of Personnel Management, 318 F.3d 1127 (Fed.Cir. 2003), argues that the language of the annual notices sent by OPM has "been held to be generally sufficient to provide sufficient notice to an annuitant in the absence of some other OPM communication that might have confused the annuitant regarding his or her annuity election obligation following a divorce, even if the language is not a model of clarity." The government thus asserts that, "[b]ecause Mrs. Simpson could not rebut the record evidence that [Mr. Simpson] received OPM's notices, the MSPB properly concluded that Mr. Simpson was warned that he needed to take steps if he wanted to provide her a former spouse annuity."

Finally, the government responds to Mrs. Simpson's third argument that there is no precedent for holding that an annuitant who fails to make an election should be deemed to have done so if he or she dies prior to the expiration of the time period for making an election, and that, on the contrary, this court rejected similar arguments in Belanger v. Office of Personnel Management, 1 F.3d 1223 (Fed.Cir. 1993), and Darsigny v. Office of Personnel Management, 787 F.2d 1555 (Fed.Cir. 1986). The government further argues that Brush can be distinguished on the ground that OPM had conceded in that case that it had not sent any annual notices to the annuitant.

Congress has expressly limited the scope of our review in an appeal from the Board. Specifically, we must affirm a decision of the Board unless it was "(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence." 5 U.S.C. § 7703(c) (2000). "Substantial evidence" is defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). A review for substantial evidence involves examination of the record as a whole, weighing "evidence that both justifies and detracts from an agency's decision." In re Gartside, 203 F.3d 1305, 1312 (Fed.Cir.2000). The Supreme Court has explained that "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's findings from being supported by substantial evidence." Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966).

We agree with Mrs. Simpson that OPM's notice was legally deficient in that it failed to adequately inform Mr. Simpson that, if he still intended that his former spouse receive an annuity, he must make a new election within two years of their divorce. Public Law 95-317, 92 Stat. 382 (1978), as amended by Reorganization Plan No. 2 of 1978, § 102, 92 Stat. 3783 (1978) (codified at 5 U.S.C. § 8339 note (1988)), states that "[t]he Director of the Office of Personal Management shall, on an annual basis, inform each annuitant of such annuitant's rights of election under sections 8339(j) and 8339(k)(2) of title 5, United States Code." In...