B-110493, OCT. 8, 1964

B-110493, OCT. 8, 1964

TO MR. JOHN SILAS UPTON:

REFERENCE IS MADE TO THE REQUEST FILED BY YOUR ATTORNEYS UNDER DATE OF JUNE 10, 1964, FOR RECONSIDERATION OF OUR DECISION OF AUGUST 5, 1963, B- 110493, 43 COMP. GEN. 117, WHEREIN WE SUSTAINED THE DISALLOWANCE OF THE CLAIM PREVIOUSLY FILED ON YOUR BEHALF FOR AN ADJUSTMENT IN RETIRED PAY BASED ON THE DECISIONS IN THE CASES OF SELIGA V. UNITED STATES, 137 CT.CL. 710 (1957) AND WILSON V. UNITED STATES, CT.CL. NO. 465-59, DATED NOVEMBER 7, 1962.

THE ADJUSTMENT IN RETIRED PAY SOUGHT ON YOUR BEHALF IS AUTHORIZED ONLY FOR PERSONS WHO WERE RETIRED FOR PHYSICAL DISABILITY PRIOR TO OCTOBER 1, 1949, AND ACCRUED ON THE BASIS OF AN ELECTION FILED BY THE RETIRED MEMBER PURSUANT TO SECTION 411 OF THE CAREER COMPENSATION ACT OF 1949, APPROVED OCTOBER 12, 1949, CH. 681, 63 STAT. 823, IN WHICH HE ELECTED TO RECEIVE DISABILITY RETIRED PAY UNDER SECTION 402 (OPTION A) OF THAT ACT. YOUR CLAIM WAS DISALLOWED FOR THE REASON THAT THE OFFICIAL RECORDS SHOWED YOU HAD NOT BEEN RETIRED FOR PHYSICAL DISABILITY, BUT THAT YOU HAD BEEN TRANSFERRED FROM THE FLEET RESERVE TO THE RETIRED LIST OF THE NAVY UPON COMPLETION OF 30 YEARS OF SERVICE, ACTIVE AND INACTIVE, IN ACCORDANCE WITH THE PROVISIONS OF THE NAVAL RESERVE ACT OF 1938, APPROVED JUNE 25, 1938, CH. 690, 52 STAT. 1175.

BY LETTER OF APRIL 5, 1963, YOUR ATTORNEYS REQUESTED RECONSIDERATION OF THE DISALLOWANCE OF YOUR CLAIM AND IN SUPPORT OF THAT REQUEST FORWARDED A COPY OF A REPORT OF MEDICAL SURVEY DATED NOVEMBER 8, 1945. THE MEMBERS OF THE BOARD CONDUCTING THAT SURVEY HAD FOUND THAT YOU WERE SUFFERING FROM A DISABILITY INCURRED IN LINE OF DUTY AND RECOMMENDED YOUR RELEASE FROM ACTIVE DUTY. YOU WERE SO RELEASED ON DECEMBER 15, 1945. IN OUR DECISION OF AUGUST 5, 1963, SUSTAINING THE DISALLOWANCE OF YOUR CLAIM, WE STATED THAT THE RECORD BEFORE US DID NOT DISCLOSE ANY FACTS WHICH WOULD APPEAR TO BRING YOUR RETIRED PAY STATUS WITHIN THE PURVIEW OF THE WILSON DECISION AND THAT THERE WAS NO INDICATION IN THE RECORD THAT YOU MADE, OR WERE DETERRED FROM MAKING BY REASON OF BEING MISLED, THE ELECTION AUTHORIZED IN SECTION 411 OF THE CAREER COMPENSATION ACT FOR PERSONNEL OF THE UNIFORMED SERVICES WHO WERE RETIRED FOR PHYSICAL DISABILITY PRIOR TO OCTOBER 1, 1949, TO RECEIVE RETIRED PAY UNDER SECTION 402 OF THAT ACT.

BY LETTER OF JUNE 10, 1964, YOUR ATTORNEYS REQUESTED RECONSIDERATION OF OUR DECISION OF AUGUST 5, 1963, STATING THAT YOU WERE MISADVISED BY THE DEPARTMENT OF THE NAVY AS TO YOUR RETIRED PAY RIGHTS AS A MEMBER RETIRED FOR PHYSICAL DISABILITY AND THEREFORE THAT YOU ARE NOW ENTITLED TO AN OPPORTUNITY TO ELECT TO RECEIVE DISABILITY RETIRED PAY BASED ON THE COURT OF CLAIMS DECISION IN THE CASE OF AKOL, ET AL. (MANDIGO) V. UNITED STATES, CT.CL. NO. 564-57, DATED MAY 15, 1964. THE EVIDENCE FURNISHED IN SUPPORT OF THIS CONTENTION IS A COPY OF A PAYROLL COMPUTING FORM DATED OCTOBER 18, 1951, SHOWING THAT EFFECTIVE IN NOVEMBER 1951 YOUR RETIRED PAY WOULD BE SUBJECT TO A DEDUCTION FOR FEDERAL WITHHOLDING TAX WITH THE FOLLOWING EXPLANATION "AS YOU WERE NOT PLACED ON THE RETIRED LIST FOR PHYSICAL DISABILITY INCURRED AS A RESULT OF ACTIVE SERVICE, YOUR PAY IS TAXABLE.'

IN THE AKOL CASE, THE PLAINTIFF, MANDIGO, RECEIVED A NOTICE SIMILAR TO THAT RECEIVED BY YOU TO THE EFFECT THAT HIS RETIRED PAY WAS TAXABLE BECAUSE HE HAD NOT BEEN RETIRED FOR PHYSICAL DISABILITY. SINCE HE, LIKE YOU, HAD BEEN FOUND TO BE SUFFERING FROM A DISABILITY AT THE TIME OF HIS RELEASE FROM A TOUR OF ACTIVE DUTY AFTER RETIREMENT, HE WAS REGARDED BY THE COURT AS ,RE-RETIRED" FOR PHYSICAL DISABILITY AND THUS ENTITLED TO MAKE AN ELECTION UNDER SECTION 411 OF THE CAREER COMPENSATION ACT.

THIS OFFICE IS FOLLOWING THE RULING IN THE AKOL (MANDIGO) CASE IN OTHER SIMILAR CASES IN THE SETTLEMENT OF CLAIMS. SEE B-154721, DATED TODAY. THAT RULING IS TO THE EFFECT THAT A MEMBER IS NOT BARRED FROM MAKING A SECTION 411 ELECTION AFTER EXPIRATION OF THE STATUTORY 5-YEAR PERIOD FIXED IN THAT SECTION IF HIS FAILURE TO ELECT WITHIN THAT PERIOD WAS CAUSED BY MISINFORMATION FURNISHED BY THE DEPARTMENT. HOWEVER, THE REQUIREMENT FOR MAKING AN ELECTION WAS NOT ELIMINATED BY THE COURT.

ALTHOUGH THE RIGHT TO MAKE AN ELECTION UNDER SECTION 411 ACCRUED IMMEDIATELY UPON ENACTMENT OF THE CAREER COMPENSATION ACT, CERTAIN PRELIMINARY ADMINISTRATIVE ACTIONS WERE REQUIRED, SUCH AS DETERMINING FROM THE RECORDS THE IDENTITY OF THE PERSONS ENTITLED TO FILE AN ELECTION AND THEIR PERCENTAGES OF DISABILITY AND NOTIFYING SUCH PERSONS OF THE RETIRED PAY ELECTIONS OPEN TO THEM. THAT SECTION PRESCRIBED 5 YEARS AS THE MAXIMUM PERIOD WITHIN WHICH SUCH INDIVIDUALS COULD DECIDE WHETHER THEY WISHED TO HAVE THEIR RETIRED PAY RECOMPUTED UNDER THE 1949 ACT AND FILE A SECTION 411 ELECTION. PRESUMABLY THAT PERIOD WAS FIXED ON THE BASIS THAT 5 YEARS ALLOWED AMPLE TIME FOR MAKING THE NECESSARY ADMINISTRATIVE DETERMINATIONS AND FILING THE NECESSARY ELECTION FORMS. IN THE ABSENCE OF SUCH AN ELECTION THE DISABILITY RETIRED MEMBER CONTINUED TO BE ENTITLED TO THE SAME RETIRED PAY WHICH HE WAS RECEIVING ON SEPTEMBER 30, 1949, IN ACCORDANCE WITH SECTION 519 OF THE ACT.

IT WILL BE NOTED THAT SECTION 411 WAS ONE OF THE SECTIONS WHICH WERE REPEALED BY SECTION 53 OF THE ACT OF AUGUST 10, 1956, CH. 1041, 70A STAT. 641, 680,"EXCEPT WITH RESPECT TO RIGHTS AND DUTIES THAT MATURED, PENALTIES THAT WERE INCURRED, AND PROCEEDINGS THAT WERE BEGUN, BEFORE THE EFFECTIVE DATE OF THIS ACT * * * (OF AUGUST 10, 1956).' HENCE, EVEN UNDER THE VIEW EXPRESSED BY THE COURT, IT APPEARS THAT ANY RIGHT TO ELECT AFTER AUGUST 10, 1956, MUST HAVE EXISTED BEFORE THAT DATE AND SUCH RIGHT MUST HAVE BEEN CONTINUED IN EXISTENCE AFTER OCTOBER 1, 1954, BY REASON OF MISINFORMATION PREVIOUSLY FURNISHED BY THE NAVY DEPARTMENT.

THERE IS NOTHING IN THE COURT'S DECISION WITH RESPECT TO MANDIGO, HOWEVER, TO INDICATE THAT IT WAS THE OPINION OF THE COURT THAT, IN A CASE WHERE THE NAVY DEPARTMENT, WITHIN THE STATUTORY PERIOD, FURNISHED ERRONEOUS INFORMATION, A RIGHT OF ELECTION CONTINUED IN EXISTENCE INDEFINITELY. ON THE CONTRARY, THE COURT MERELY CONCLUDED THAT THE PLAINTIFF HAD A RIGHT OF ELECTION AND THAT THE 5-YEAR STATUTORY LIMITATION IN SECTION 411 DID NOT BAR HIS RECOVERY. IN VIEW OF THE TIME LIMITATION FIXED IN SECTION 411 FOR MAKING ELECTIONS, WHICH INDICATES AN INTENTION OF CONGRESS THAT RETIRED PERSONS MUST ACT DILIGENTLY IN ORDER TO HAVE THE ADVANTAGE OF SUCH AN ELECTION, IT WOULD SEEM PROPER TO CONCLUDE THAT A RETIRED MEMBER MAY BE ALLOWED ONLY A REASONABLE TIME FOLLOWING RECEIPT OF THE INFORMATION WHICH HE ALLEGES TO HAVE MISLED HIM WITHIN WHICH TO TAKE ACTION TO ESTABLISH A PROPER ELECTION. IN OTHER WORDS, WHILE SUCH A MEMBER'S RIGHT TO MAKE A PROPER ELECTION WAS NOT LOST MERELY BECAUSE HE DID NOT CHALLENGE THE ADMINISTRATIVE DENIAL OF THAT RIGHT AND ESTABLISH A PROPER ELECTION WITHIN THE SPECIFIED 5-YEAR PERIOD, SUCH ADMINISTRATIVE DENIAL DOES NOT WARRANT THE GRANTING OF UNREASONABLE DELAY FOR THE MAKING OF A PROPER ELECTION. COMPARE THE DECISION OF NOVEMBER 7, 1962, IN THE CASE OF AFLAGUE, ET AL. (FORSTER) V. UNITED STATES, CT.CL. NO. 212-56, COBB, ET AL. (ELLIS) V. UNITED STATES, CT.CL. NO. 430-56, AND WILSON V. UNITED STATES, CT.CL. NO. 465-59, WHEREIN THE COURT OF CLAIMS HELD THAT PLAINTIFFS FORSTER AND ELLIS WERE FOREVER BARRED FROM RECEIVING THE BENEFITS OF SECTION 402 OF THE CAREER COMPENSATION ACT BECAUSE, ALTHOUGH THEY RECEIVED NO INFORMATION FROM THE DEPARTMENT OF THE NAVY RELATIVE TO THEIR RIGHT TO FILE A SECTION 411 ELECTION, THEY MADE NO ATTEMPT TO FILE SUCH AN ELECTION WITHIN THE STATUTORY 5-YEAR PERIOD.

SINCE THE ACT SPECIFIED 5 YEARS FOLLOWING THE EFFECTIVE DATE THEREOF AS THE PERIOD DURING WHICH SECTION 411 ELECTIONS COULD BE FILED,THE DATE ON WHICH THE ADMINISTRATIVE OFFICE FURNISHED THE ERRONEOUS INFORMATION COULD REASONABLY BE CONSTRUED AS SUPERSEDING THE EFFECTIVE DATE OF THE ACT AS THE BEGINNING DATE OF SUCH 5-YEAR PERIOD, THEREBY ALLOWING THE MEMBER A FULL 5 YEARS FROM THE DATE THE ERRONEOUS INFORMATION WAS RECEIVED TO DETERMINE HIS RIGHTS AND FILE THE REQUIRED ELECTION. HOWEVER, IN VIEW OF THE CONFUSION WHICH HAS EXISTED RELATIVE TO ELECTIONS, WE ARE CONSTRAINED TO ADOPT A MORE LENIENT VIEW.

THE ACT OF OCTOBER 9, 1940, CH. 788, 54 STAT. 1061, 31 U.S.C. 71A, GENERALLY BARS CONSIDERATION OF CLAIMS NOT RECEIVED IN THE GENERAL ACCOUNTING OFFICE WITHIN 10 FULL YEARS AFTER THE DATE SUCH CLAIM FIRST ACCRUED. IN THE ABSENCE OF A PRECEDENT ESTABLISHING A DEFINITE PERIOD FOR TAKING ACTION TO ESTABLISH A PROPER ELECTION, A SIMILAR 10-YEAR PERIOD WILL BE APPLIED BY THIS OFFICE AS A REASONABLE LENGTH OF TIME AFTER RECEIPT OF MISINFORMATION DURING WHICH ELECTIONS MAY BE FILED. UNDER THE THEORY ADOPTED BY THE COURT, THE INFORMATION FURNISHED IN OCTOBER 1951 EXEMPTED YOU FROM THE REQUIREMENT OF MAKING AN ELECTION BY OCTOBER 1, 1954. YOUR RIGHT TO MAKE AN ELECTION BASED ON THE FACT THAT THE INFORMATION FURNISHED YOU WAS ERRONEOUS ACCRUED IN OCTOBER 1951 AND IT APPEARS THAT YOU HAD NOT EXERCISED YOUR RIGHT TO FILE AN ELECTION WITH THE DEPARTMENT OF THE NAVY OF THE SECTION 402 BENEFITS YOU NOW CLAIM PRIOR TO JANUARY 28, 1963, THE DATE OF YOUR ATTORNEY'S LETTER TO THIS OFFICE. SINCE MORE THAN 10 YEARS AFTER THE RIGHT TO MAKE THAT ELECTION ACCRUED HAD EXPIRED BEFORE JANUARY 28, 1963, WE CONCLUDE THAT YOU DID NOT FILE A TIMELY ELECTION OF SECTION 402 BENEFITS.

ALSO, IT SHOULD BE NOTED THAT ON MAY 23, 1952, FOLLOWING RECEIPT OF THE MISINFORMATION, YOU FILED A PETITION IN THE COURT OF CLAIMS AS PLAINTIFF NO. 90 IN THE CASE OF MOJICA, ET AL. V. UNITED STATES, CT.CL. NO. 264-52, IN WHICH YOU SOUGHT AN ADJUSTMENT IN RETIRED PAY FOR THE PERIOD FROM THE DATE OF YOUR RELEASE FROM ACTIVE DUTY TO THE DATE OF JUDGMENT BASED ON THE NAVAL RESERVE ACT OF 1938 AS AMENDED BY THE ACT OF AUGUST 10, 1946, CH. 952, 60 STAT. 993. BY JUDGMENT ENTERED MAY 5, 1953, YOU WERE AWARDED $1,809.43, REPRESENTING THE ADJUSTMENT CLAIMED BY YOU FOR THE PERIOD DECEMBER 16, 1945, TO JUNE 30, 1952, INCLUSIVE. THAT PORTION OF THE JUDGMENT COVERING THE PERIOD AFTER SEPTEMBER 30, 1949, WAS COMPUTED UNDER A FORMULA WHICH IS NOT AUTHORIZED UNDER SECTION 402 OF THE CAREER COMPENSATION ACT FOR MEMBERS RETIRED FOR DISABILITY, BUT WHICH IS ALLOWABLE UNDER SECTION 511 OF THAT ACT IN THE CASES OF PERSONS RETIRED BEFORE OCTOBER 1, 1949, OTHER THAN FOR PHYSICAL DISABILITY, OR UNDER SECTION 519 OF THAT ACT, THE SAVED PAY PROVISION. MEMBERS RETIRED PRIOR TO OCTOBER 1, 1949, FOR PHYSICAL DISABILITY COULD RECEIVE RETIRED PAY THEREAFTER UNDER THE PROVISIONS OF SECTION 511 ONLY ON THE BASIS OF AN ELECTION UNDER SECTION 411 OF OPTION (B). 43 COMP. GEN. 6.

IN 1956, YOU FILED ANOTHER PETITION IN THE COURT OF CLAIMS AS PLAINTIFF NO. 126 IN THE CASE OF PRENDABLE, ET AL. V. UNITED STATES, CT.CL. NO. 42- 56, IN WHICH YOU SOUGHT A 10 PERCENT INCREASE IN YOUR RETIRED PAY. YOU BASED YOUR CLAIM ON THE RULE OF RES JUDICATA, REFERRING TO THE PRIOR JUDGMENT WHICH WAS ENTERED ON STIPULATION OF THE PARTIES ON MAY 5, 1953. THE COURT DISMISSED YOUR PETITION ON ITS MERITS ON JULY 12, 1957, 139 CT.CL. 748.

THE ACTION THUS TAKEN BY YOU WITHIN THE 10-YEAR PERIOD AFTER RECEIPT OF THE MISINFORMATION IS ENTIRELY INCONSISTENT WITH AN ELECTION OF THE BENEFITS NOW CLAIMED. SUCH ACTION MUST BE REGARDED AS IN EFFECT CONSTITUTING AN ELECTION OF OTHER THAN THE DISABILITY RETIRED PAY WHICH YOU WOULD NOW ELECT.

UPON RECONSIDERATION OF OUR DECISION OF AUGUST 5, 1963, IN THE LIGHT OF THE NEW EVIDENCE FURNISHED WITH LETTER OF JUNE 10, 1964 (COPY OF PAYROLL COMPUTING FORM DATED OCTOBER 18, 1951), WE FIND NO BASIS FOR ALLOWING YOU TO ELECT AT THIS TIME TO HAVE YOUR RETIRED PAY COMPUTED UNDER SECTION 402 OF THE CAREER COMPENSATION ACT. ACCORDINGLY, THE DENIAL OF YOUR CLAIM IS AGAIN SUSTAINED.