B-138962, JUL. 7, 1959

B-138962, JUL. 7, 1959

TO THE SECRETARY OF THE TREASURY:

IN A LETTER OF MARCH 4, 1959, CC:AT:AGB, THE DIRECTOR OF THE OPERATING FACILITIES DIVISION, INTERNAL REVENUE SERVICE, SUBMITTED FOR OUR CONSIDERATION A QUESTION ARISING OUT OF THE SETTLEMENT OF THE SUIT OF CHARLES LAMBERT AGAINST THE UNITED STATES, IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI. THE LETTER WILL BE CONSIDERED AS A REQUEST FROM YOU FOR A DECISION UNDER THE PROVISIONS OF THE ACT OF JULY 31, 1894, 28 STAT. 207, 208, AS AMENDED, 42 STAT. 24.

AS THE RESULT OF AN ACCIDENT ON A PUBLIC HIGHWAY IN MISSISSIPPI, INVOLVING AN AUTOMOBILE DRIVEN BY AN INTERNAL REVENUE SERVICE EMPLOYEE ON OFFICIAL BUSINESS AND A MOTORCYCLE DRIVEN BY CHARLES LAMBERT, THE LATTER FILED SUIT UNDER THE FEDERAL TORT CLAIMS ACT FOR THE SUM OF$50,000. MR. LAMBERT'S ATTORNEYS OFFERED TO SETTLE THE SUIT FOR THE SUM OF $6,000 AND ASSURANCE THAT THEIR CLIENT WOULD NOT HAVE TO PAY FOR HOSPITAL AND MEDICAL SERVICES RECEIVED FROM THE VETERANS ADMINISTRATION. IT APPEARS MR. LAMBERT, A VETERAN, WAS ADMITTED TO A VETERANS ADMINISTRATION HOSPITAL FOR TREATMENT OF THE INJURIES SUSTAINED IN THE ACCIDENT AND HAS BEEN BILLED BY THE VETERANS ADMINISTRATION IN THE AMOUNT OF $4,684.86.

THE DEPARTMENT OF JUSTICE, AFTER INFORMING THE INTERNAL REVENUE SERVICE OF THE OFFER OF COMPROMISE AND THAT THE VETERANS ADMINISTRATION WISHED TO BE REIMBURSED FOR THE MEDICAL SERVICES FURNISHED MR. LAMBERT, ACCEPTED THE COMPROMISE OFFER WITH THE APPARENT ACQUIESCENCE OF THE INTERNAL REVENUE SERVICE.

THE DISTRICT COURT APPROVED THE COMPROMISES BY AN ORDER OF OCTOBER 25, 1958. THE ORDER, PROVIDING FOR THE PAYMENT OF $6,000 TO THE PLAINTIFF AND THE WAIVER OF THE VETERANS ADMINISTRATION HOSPITAL BILL, WENT ON TO STATE "THAT INSOFAR AS PLAINTIFF IS CONCERNED DEFENDANT UNITED STATES, ON BEHALF OF THE VETERANS ADMINISTRATION, WAIVES COLLECTION OF PLAINTIFF'S HOSPITAL BILL IN THE SUM OF $4,684.86.'

THE DEPARTMENT OF JUSTICE ON NOVEMBER 5, 1958, FORWARDED THE COURT ORDER TO THE INTERNAL REVENUE SERVICE AND REQUESTED THE PREPARATION OF CHECKS FOR THE SUMS PAYABLE, UNDER THE ORDER, TO MR. LAMBERT AND HIS ATTORNEYS. THE DEPARTMENT ALSO REQUESTED THE SERVICE TO FORWARD TO THE VETERANS ADMINISTRATION A CHECK IN THE AMOUNT OF $4,684.86.

IN A LETTER DATED DECEMBER 12, 1958, THE CHIEF COUNSEL OF THE INTERNAL REVENUE SERVICE ADVISED THE DEPARTMENT OF JUSTICE THAT THE ORDER OF THE COURT PRESENTED NO PROBLEM AS REGARDS THE PAYMENT TO MR. LAMBERT AND HIS ATTORNEYS, BUT THAT IT DID NOT APPEAR THE ORDER AFFORDED ANY BASIS FOR THE PAYMENT OF THE MEDICAL BILL BY THE INTERNAL REVENUE SERVICE. THE LETTER WENT ON TO STATE THAT IF THE VETERANS ADMINISTRATION INSISTED ON REIMBURSEMENT FROM THE INTERNAL REVENUE SERVICE THE COURT ORDER SHOULD BE AMENDED TO PROVIDE FOR THE ISSUANCE OF A CHECK TO CHARLES LAMBERT IN THE AMOUNT OF $4,684.86 AND FOR THE INDORSEMENT OF SUCH CHECK BY THE PLAINTIFF TO THE VETERANS ADMINISTRATION FOR THE PAYMENT OF THE HOSPITAL BILL. THAT UNLESS THE ORDER WAS SO CHANGED IT WOULD BE NECESSARY FOR THE VETERANS ADMINISTRATION TO PROCESS ANY CLAIM IT MIGHT ASSERT AGAINST THE INTERNAL REVENUE SERVICE IN THE CASE THROUGH THE GENERAL ACCOUNTING OFFICE.

THE COURT ON DECEMBER 31, 1958, AMENDED ITS FINAL ORDER AS FOLLOWS:

"IT APPEARING TO THE COURT THAT THE INTERNAL REVENUE SERVICE SHOULD REIMBURSE THE VETERANS ADMINISTRATION FOR THE PLAINTIFF'S HOSPITAL BILL INCURRED ON ACCOUNT OF THE ACCIDENT COMPLAINED OF IN THE COMPLAINT, SAID BILL BEING IN THE SUM OF $4,684.86, AND THAT IT WAS THE INTENTION OF THE VETERANS ADMINISTRATION TO WAIVE THE HOSPITAL BILL AS TO THE PLAINTIFF ONLY AND THAT AGENCY INSISTS ON REIMBURSEMENT FROM THE INTERNAL REVENUE SERVICE, AND THE COURT BEING OF THE OPINION THAT THIS REIMBURSEMENT SHOULD BE MADE, IT IS HEREBY ORDERED AND ADJUDGED THAT THE INTERNAL REVENUE SERVICE ISSUE ITS CHECK PAYABLE JOINTLY TO MESSRS. BUNTIN AND MARTIN, ATTORNEYS OF RECORD FOR CHARLES LAMBERT, AND THE VETERANS ADMINISTRATION OF THE UNITED STATES, AND DELIVER THE SAME TO THE UNITED STATES ATTORNEY FOR APPROPRIATE DISPOSITION. THE UNITED STATES ATTORNEY IS DIRECTED TO OBTAIN AN ENDORSEMENT OF SUCH CHECK BY PLAINTIFF'S ATTORNEYS AND THEN TURN SAME OVER TO THE VETERANS ADMINISTRATION FOR PAYMENT OF THE HOSPITAL BILL ABOVE MENTIONED. LET THE COURT'S FINAL ORDER IN THIS CAUSE HERETOFORE ENTERED ON THE 25TH DAY OF OCTOBER 1958 BE AMENDED TO THE EXTENT HEREINABOVE SET FORTH.'

THE LETTER OF THE DIRECTOR, OPERATING FACILITIES DIVISION, REQUESTS OUR OPINION WHETHER IT WOULD BE PROPER FOR THE INTERNAL REVENUE TO ISSUE A CHECK IN COMPLIANCE WITH THE AMENDED COURT ORDER.

SECTION 2677, TITLE 28, U.S.C. AUTHORIZES THE ATTORNEY GENERAL, WITH THE APPROVAL OF THE COURT, TO ARBITRATE, COMPROMISE, OR SETTLE ANY CIVIL ACTION ON CLAIMS FOR MONETARY DAMAGES FOR PERSONAL OR PROPERTY INJURY CAUSED BY THE NEGLIGENT OR WRONGFUL ACT OF AN EMPLOYEE OF THE GOVERNMENT WHILE ACTING WITHIN THE SCOPE OF HIS EMPLOYMENT. AND SECTION 2672 PROVIDES THAT "ANY AWARD, COMPROMISE, OR SETTLEMENT MADE BY THE ATTORNEY GENERAL PURSUANT TO SECTION 2677 OF THIS TITLE, SHALL BE PAID BY THE HEAD OF THE FEDERAL AGENCY CONCERNED OUT OF APPROPRIATIONS AVAILABLE TO SUCH AGENCY.'

THE COURT ORDER AS AMENDED, WITH WHICH WE ARE HERE CONCERNED, WAS ISSUED INCIDENT TO THE COMPROMISE OF A CLAIM AGAINST THE UNITED STATES UNDER AUTHORITY OF SECTION 2677. THE INSTRUCTION IN THE ORDER, THAT THE INTERNAL REVENUE SERVICE ISSUE A CHECK FOR REIMBURSEMENT OF THE VETERANS ADMINISTRATION, WAS FOR THE PURPOSE OF THE COMPROMISE AND NEED NOT BE VIEWED AS INVOLVING MERELY AN INTERNAL FISCAL TRANSACTION OF THE GOVERNMENT BEYOND THE PURVIEW OF THE COURT. FURTHERMORE, THE APPROPRIATION FOR SALARIES AND EXPENSES OF THE INTERNAL REVENUE SERVICE IS AVAILABLE FOR THE PAYMENT OF THE HOSPITAL AND MEDICAL EXPENSES INCURRED, AS AN ITEM OF THE COMPROMISE, AND WE SEE NO SERIOUS OBJECTION TO COMPLIANCE BY THE INTERNAL REVENUE SERVICE WITH THE AMENDED ORDER OF THE COURT.