Spellissy v. United States

• Decision Date: 02 February 2012
• Docket Number: No. 11-205 C,11-205 C
• Parties: THOMAS F. SPELLISSY, Plaintiff, v. THE UNITED STATES, Defendant.
• Court: U.S. Claims Court

THOMAS F. SPELLISSY, Plaintiff,

v.THE UNITED STATES, Defendant.

No. 11-205 C

United States Court of Federal Claims

Filed: February 2, 2012

TO BE PUBLISHED

Military pay case; 10 U.S.C. § 1370 and Army Regulation 15-80 paragraph 4-1.a (July 12, 2002); retirement grade determinations for officers; money-mandating provisions; 10 U.S.C. § 1552 and Army Regulation 15-185 (Mar. 31, 2006); review of action by military correction board; Army properly reopened retirement grade determination based on plaintiff's post-retirement conviction for conspiracy where offense occurred before retirement; Army Regulation 15-80 paragraph 4-1.c; Army properly found plaintiff's service in the rank of Colonel (O-6) was not satisfactory in light of finding that plaintiff engaged in criminal conduct while on active duty; Army Regulation 15-80 paragraphs 2-4 and 2-5; law of the case, issue preclusion, claim preclusion, judicial estoppel.

Jeffrey J. Del Fuoco, Washington, D.C., for plaintiff.

Joseph A. Pixley, Trial Attorney, Kirk T. Manhardt, Assistant Director, Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division, Tony West, Assistant Attorney General, Department of Justice, Washington, D.C., for defendant. John G. Doyle, Captain, Litigation Division, United States Army, Fort Belvoir, Va., of counsel.

OPINION AND ORDER

GEORGE W. MILLER, Judge

On April 4, 2011, plaintiff Thomas F. Spellissy filed this military pay action against defendant, the United States, alleging that the Army Board for Correction of Military Records ("correction board") improperly denied plaintiff's application to correct his military records to reflect that he retired in the grade of Colonel, O-6. See Compl. (docket entry 1). Specifically, plaintiff alleges that the United States Army, following plaintiff's post-retirement criminal conviction, improperly reopened his retirement grade determination and improperly found that plaintiff failed to serve "satisfactorily" in the grade of Colonel, O-6, for three years. Defendant filed a motion to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Rules of the Court of Federal Claims ("RCFC") on the ground thatplaintiff's claim is non-justiciable¹ or, alternatively, for judgment on the administrative record pursuant to RCFC 52.1 (docket entry 9, Sept. 16, 2011). Plaintiff filed a response in opposition to defendant's motion (docket entry 10, Oct. 17, 2011), and defendant filed a reply in support of its motion (docket entry 11, Nov. 3, 2011). For the reasons stated below, the Court DENIES defendant's motion to dismiss for failure to state a claim because the Court concludes that plaintiff's claim is justiciable, and the Court GRANTS defendant's alternative motion for judgment on the administrative record.

I. Background

A. Events Preceding Retirement and Retirement from Active Duty

In March 2004, plaintiff, a Colonel in the Army, received a notice informing him that he would be "retired from active duty, released from assignment and duty, and . . . placed on the retired list" on December 31, 2004. Administrative R. ("AR") 000220 (docket entries 9-4 to 9-6). Plaintiff's retirement was voluntary and based on length of service. Id. In plaintiff's last assignment, he was the Program Executive Officer for Special Programs with the United States Special Operations Command ("USSOCOM") at MacDill Air Force Base in Tampa, Florida. See AR 000225-26.

Plaintiff filed an application for permission from the Army to act as president of, and to engage in business development and consulting for, a company plaintiff had formed called Strategic Defense International, Inc. ("Strategic Defense") during plaintiff's impending "terminal leave"² before retirement. See AR 000183. Plaintiff represented that his work during "terminal leave" would "[i]nvolve working for a firm . . . that is engaged, or is endeavoring to engage, in business transactions . . . with an agency of the Department of Defense." Id. Plaintiff's application noted that he understood that he "w[ould] not be able to represent any Department of Defense Contractor to solicit business to [sic] the United States Government until after [plaintiff's] retirement date, 31 December, 2004." AR 000184. Plaintiff's application to work for Strategic Defense in the manner indicated was approved on July 23, 2004. See AR 000183.

Although plaintiff would not be officially retired until December 31, 2004, plaintiff's last assignment ended on July 31, 2004. See AR 000225-26. Plaintiff was on "permissive temporary duty," "ordinary leave," and "terminal leave" from August 1 to December 31, 2004. See AR 000133-34, 000226. Plaintiff worked for a contractor for USSOCOM from October 21 to November 26, 2004. See AR 000134, 000157-58. Plaintiff also was paid by USSOCOM to attend meetings overseas to discuss USSOCOM ammunition programs. See AR 000134, 000189. In October and November 2004, e-mails suggest that plaintiff was working as president of his newly formed company, Strategic Defense. See AR 000099-124.

Plaintiff officially retired from active duty on December 31, 2004. See AR 000219; Compl. ¶ 9. Plaintiff was retired in the grade of Colonel, O-6, after more than twenty-five years of active duty service, with plaintiff achieving his most recent promotion on December 1, 2001. See AR 000219-20, 000233.

B. Plaintiff's Post-Retirement Criminal Conviction

In November 2005, a federal grand jury indicted plaintiff and Strategic Defense on charges related to plaintiff's alleged attempt to induce a public official at MacDill Air Force Base to award work to Strategic Defense's clients. See Def. Mot. Ex. C. Plaintiff and Strategic Defense each were charged with one count of conspiracy to defraud the United States and to commit offenses against the United States in violation of 18 U.S.C. § 371, two counts of bribery in violation of 18 U.S.C. §§ 2 and 201(b)(1)(A)-(B), and two counts of wire fraud in violation of 18 U.S.C. §§ 2, 1343, and 1346. Id. In May 2006, the trial jury found plaintiff and Strategic

Defense guilty on all five counts. See AR 000082-85.

Plaintiff and Strategic Defense moved for a judgment notwithstanding the verdict and, in the alternative, a new trial on all five counts. See AR 000198-215. In July 2006, the district court judge denied the motion on the conspiracy count, but granted the motion on the remaining counts. The district court judge cited e-mails from October and November 2004—prosecution exhibits 10, 11, 12, and 28 in the criminal case—as "ample" evidence from which the jury could find plaintiff and Strategic Defense guilty of conspiracy. See AR 000201-04, 000208; see also AR 00099-104 (prosecution exhibits 11 and 12), 000122 (prosecution exhibit 28). E-mails between plaintiff and William Burke, an employee of USSOCOM, suggest that plaintiff and Mr. Burke agreed that Mr. Burke would give preferential treatment to Strategic Defense's clients. AR 000099-104 (prosecution exhibits 11 and 12). One e-mail from Mr. Burke to a contractor showed Mr. Burke encouraging the contractor to retain Strategic Defense. See AR 000122 (prosecution exhibit 28). As noted by defendant, the e-mails on which the district court judge relied were transmitted before plaintiff officially retired on December 31, 2004. See Def.'s Mot. 6.

In August 2006, criminal judgments were entered and plaintiff was, inter alia, sentenced to fifteen months imprisonment. See AR 000072-78. Plaintiff's conviction was affirmed by the United States Court of Appeals for the Eleventh Circuit in September 2007. United States v. Spellissy, 243 F. App'x 550, 550-51 (11th Cir. 2007) (per curiam) (stating that "[t]he convictions arose out of the alleged general services agreement between [plaintiff], who was on 'terminal leave' from the military, and [Mr.] Burke, a civilian contractor, to obtain preferential treatmentfor their clients"). The Eleventh Circuit recently denied plaintiff's latest appeal. United States v. Spellissy, 428 F. App'x 780 (11th Cir. 2011); see also Compl. ¶ 10.

C. Deputy Assistant Secretary of the Army's Direction that Plaintiff Be Retired in the Grade of Lieutenant Colonel, O-5

In October 2006, a Deputy Assistant Secretary of the Army wrote:

The [Army Grade Determination Review Board ("grade determination board")] has reviewed the retired grade for COL (Ret.) Thomas F. Spellissy [redacted] pursuant to [Army Regulation] 15-80, paragraph 4-1c to complete a new grade determination. Specifically, the Government did not discover COL Spellissy's misconduct on active duty until after his retirement, could not discover his misconduct before his retirement through due diligence, and did not therefore document his misconduct through conviction in federal district court until after his retirement.

I direct he will be retired from the United States Army in the grade of LTC/O-5.

AR 000069 (second alteration in original). The Deputy Assistant Secretary attached to his decision the criminal judgments against plaintiff and Strategic Defense and the e-mail exhibits in the criminal case, including the e-mails on which the district court judge relied in upholding the conspiracy conviction. See AR 000072-81, 000099-124.

While not addressed by the parties, plaintiff appears to have voluntarily retired based on length of service pursuant to 10 U.S.C. § 3911 (governing retirement of commissioned officers of the Army based on twenty or more years of service). The retirement grade for commissioned officers is governed by 10 U.S.C. § 1370. See also 10 U.S.C. § 3961 (specifically applying § 1370, which governs all military departments, to the Army).

According to 10 U.S.C. § 1370(a)(1), a commissioned officer of the military, other than a commissioned warrant officer, "shall . . . be retired in the highest grade in which he served on active duty satisfactorily, as determined by the Secretary of the military department concerned." 10 U.S.C. § 1370(a)(1) (emphasis added)....