B-177641, MAR 1, 1973

B-177641, MAR 1, 1973

CIVILIAN EMPLOYEE - REIMBURSEMENT FOR LOAN ORIGINATION FEES - INCORRECT ADVICE - LIABILITY OF GOVERNMENT OFFICER DECISION AFFIRMING THE PRIOR SETTLEMENT ACTION WHICH DISALLOWED THE CLAIM OF JAMES E. O'DONNELL FOR REIMBURSEMENT OF A LOAN ORIGINATION FEE INCURRED IN THE PURCHASE OF REAL ESTATE INCIDENT TO A TRANSFER OF OFFICIAL STATION. WHILE IT IS UNFORTUNATE THAT CLAIMANT WAS MISLED AS TO HIS REIMBURSEMENT RIGHTS, THE GOVERNING REGULATION, OMB CIRCULAR NO. A-56, IS A STATUTORY REGULATION AND ENTITLEMENTS THEREIN MAY NOT BE ENLARGED BY GAO OR ANY OTHER OFFICE. SECTION 4.2D OF CIRCULAR NO. A-56 PROHIBITS REIMBURSEMENT OF "FINANCE CHARGES," AND LOAN ORIGINATION FEES ARE DESIGNATED AS FINANCE CHARGES IN REGULATION Z ISSUED PURSUANT TO THE TRUTH IN LENDING ACT BY THE FEDERAL RESERVE BOARD. 12 CFR 226.4(A). IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY, THE UNITED STATES IS NEITHER LIABLE FOR, NOR BOUND OR ESTOPPED BY, THE NEGLIGENT OR ERRONEOUS ACTS OF ITS OFFICERS, AGENTS OR EMPLOYEES, EVEN THOUGH COMMITTED IN THE PERFORMANCE OF THEIR OFFICIAL DUTIES. UTAH POWER AND LIGHT CO. V. UNITED STATES, 243 U.S. 389, 409 (1917). FURTHER, PUBLIC OFFICERS ARE NOT PERSONALLY LIABLE FOR MISTAKES OF EITHER FACT OR LAW IN PERFORMING ACTS IN RELATION TO MATTERS GOVERNED BY A LAWFUL REQUIREMENT OF A DEPARTMENT UNDER WHOSE AUTHORITY THE OFFICER IS ACTING. COOPER V. O'CONNOR, 107 F.2D 207 (1939).

TO MR. JAMES E. O'DONNELL:

YOUR LETTER OF OCTOBER 25, 1972, IN EFFECT REQUESTS RECONSIDERATION OF THE ACTION TAKEN BY OUR TRANSPORTATION AND CLAIMS DIVISION IN THE SETTLEMENT CERTIFICATE DATED AUGUST 16, 1972, DISALLOWING YOUR CLAIM FOR REIMBURSEMENT OF A LOAN ORIGINATION FEE INCURRED IN THE PURCHASE OF REAL ESTATE INCIDENT TO A TRANSFER OF OFFICIAL STATION.

IN JULY 1971 YOUR AGENCY NOTIFIED YOU BY LETTER OF YOUR IMPENDING TRANSFER IN SEPTEMBER TO BOULDER, COLORADO. ENCLOSED WITH THIS LETTER WAS A SUMMARY OF TRAVEL BENEFITS AVAILABLE TO CIVILIAN EMPLOYEES IN CONNECTION WITH A PERMANENT CHANGE IN DUTY STATION WHICH OUTLINED EXPENSES REIMBURSABLE BY THE GOVERNMENT. THE SUMMARY ERRONEOUSLY INDICATED THAT LOAN ORIGINATION FEES WERE REIMBURSABLE. ALTHOUGH SUCH FEES HAD BEEN AUTHORIZED BY OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56 IN PRIOR YEARS, THAT CIRCULAR WAS REVISED ON JUNE 26, 1969. THE LOAN ORIGINATION FEE WAS REMOVED FROM THE LISTING OF REIMBURSABLE EXPENSES. FURTHERMORE, THE REVISION PROHIBITED REIMBURSEMENT FOR EXPENSES WHICH ARE DETERMINED TO BE FINANCE CHARGES UNDER THE TRUTH IN LENDING ACT, TITLE I, PUBLIC LAW 90- 321 AND REGULATION "Z" ISSUED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

IT IS YOUR CONTENTION THAT YOU RELIED ON THE INFORMATION CONTAINED IN THE SUMMARY AND INCURRED A LOAN FEE EXPENSE OF $317 INCIDENT TO THE PURCHASE OF A HOUSE AT YOUR NEW OFFICIAL DUTY STATION FOR WHICH YOU DESIRE REIMBURSEMENT. IN THIS CONNECTION IT IS NOTED THAT WHETHER OR NOT THE ERRONEOUS ADVICE HAD BEEN GIVEN TO YOU, YOU WOULD HAVE BEEN REQUIRED TO PAY THE LOAN ORIGINATION FEE. IN THE EVENT REIMBURSEMENT OF THE LOAN FEE IS NOT ALLOWED, YOU DESIRE INFORMATION CONCERNING FURTHER AVENUES OF APPEAL AND ANY LEGAL ACTION YOU MAY HAVE AGAINST THOSE OFFICIALS THAT CAUSED YOU TO BE MISLED.

THE INTRODUCTORY PARAGRAPH OF THE DOCUMENT CONTAINING THE ERRONEOUS INFORMATION READS IN PART AS FOLLOWS:

"STATEMENTS CONTAINED IN THIS DOCUMENT USE INFORMATION FROM BOB FORM 56 AS SUPPLEMENTED, AND THE ESSA TRAVEL HANDBOOK. THIS BROCHURE IS NOT INTENDED TO SUBSTITUTE FOR THE PRECEDING AUTHORITIES, BUT MERELY TO SUPPLEMENT THESE DOCUMENTS. ***"

THE ABOVE-QUOTED SENTENCES SUGGEST THAT THE SUMMARY SHOULD BE EMPLOYED ONLY AS A GUIDE AND THAT OMB CIRCULAR NO. A-56 AND THE ESSA TRAVEL HANDBOOK SHOULD BE CONSULTED FOR AUTHORITATIVE TREATMENT AS TO TRAVEL BENEFITS AVAILABLE TO TRANSFEREES. WHILE IT IS UNFORTUNATE YOU WERE MISLED AS TO YOUR REIMBURSEMENT RIGHTS, THE GOVERNING REGULATION, CIRCULAR NO. A-56, IS A STATUTORY REGULATION AND ENTITLEMENTS THEREIN MAY NOT BE ENLARGED BY THIS OFFICE OR ANY OTHER OFFICE.

SECTION 4.2D OF CIRCULAR NO. A-56 PROVIDES IN PERTINENT PART:

"*** NO FEE, COST, CHARGE, OR EXPENSE IS REIMBURSABLE WHICH IS DETERMINED TO BE A PART OF THE FINANCE CHARGE UNDER THE TRUTH IN LENDING ACT, TITLE I, PUBLIC LAW 90-321, AND REGULATION Z ISSUED PURSUANT THERETO BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM."

FEES DESIGNATED BY REGULATION Z TO BE CONSIDERED PART OF THE FINANCE CHARGE ARE SET FORTH IN 12 CFR 226.4(A) AND READS IN PERTINENT PART AS FOLLOWS:

"(A) GENERAL RULE. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE AMOUNT OF THE FINANCE CHARGE IN CONNECTION WITH ANY TRANSACTION SHALL BE DETERMINED AS THE SUM OF ALL CHARGES, PAYABLE DIRECTLY OR INDIRECTLY BY THE CUSTOMER, AND IMPOSED DIRECTLY OR INDIRECTLY BY THE CREDITOR AS AN INCIDENT TO OR AS A CONDITION OF THE EXTENSION OF CREDIT, WHETHER PAID OR PAYABLE BY THE CUSTOMER, THE SELLER, OR ANY OTHER PERSON ON BEHALF OF THE CUSTOMER TO THE CREDITOR OR TO A THIRD PARTY, INCLUDING ANY OF THE FOLLOWING TYPES OF CHARGES:

"(1) INTEREST, TIME PRICE DIFFERENTIAL, AND ANY AMOUNT PAYABLE UNDER A DISCOUNT OR OTHER SYSTEM OF ADDITIONAL CHARGES.

"(2) SERVICE, TRANSACTION, ACTIVITY, OR CARRYING CHARGE.

"(3) LOAN FEE, POINTS, FINDER'S FEE, OR SIMILAR CHARGE. ***"

ACCORDINGLY, THERE IS NO AUTHORITY FOR REIMBURSING AN EMPLOYEE FOR THE COST OF A LOAN ORIGINATION FEE.

IT HAS LONG BEEN HELD THE GOVERNMENT IS NOT ESTOPPED FROM REPUDIATING THE ADVICE GIVEN BY ITS OFFICIALS IF THAT ADVICE WAS ERRONEOUS. IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY, THE UNITED STATES IS NEITHER LIABLE FOR, NOR IS IT BOUND OR ESTOPPED BY, THE NEGLIGENT OR ERRONEOUS ACTS OF ITS OFFICERS, AGENTS OR EMPLOYEES, EVEN THOUGH COMMITTED IN THE PERFORMANCE OF THEIR OFFICIAL DUTIES. UTAH POWER AND LIGHT CO. V. UNITED STATES, 243 U.S. 389, 409 (1917); GERMAN BANK V. UNITED STATES, 148 U.S. 573, 579 (1893); 44 COMP. GEN. 337 (1964); 46 ID. 348 (1966). THIS RULE PERTAINS AS A MATTER OF PUBLIC POLICY FOR THE PROTECTION OF PUBLIC FUNDS. ITS JUSTIFICATION LIES IN PART IN THE FACT THAT AGENTS OF THE GOVERNMENT HAVE KNOWN AND LIMITED POWERS EXPLICITLY DEFINED BY PUBLIC INSTRUMENTS SUCH AS STATUTES. EXECUTIVE ORDERS AND REGULATIONS, AND NO ADMINISTRATIVE OFFICIAL CAN ENLARGE RIGHTS GRANTED BY STATUTE AND REGULATION BY MISINFORMING INDIVIDUALS OF THEIR RIGHTS. BRUBAKER V. UNITED STATES, 342 F.2D 655 (1965); BLAKE CONSTRUCTION COMPANY INC. V. UNITED STATES, 296 F.2D 393 (1961); B-175499, APRIL 21, 1972.

WHILE WE RECOGNIZE THAT THIS RULE MAY OPERATE HARSHLY IN SOME CASES WE ARE NEVERTHELESS CONSTRAINED TO APPLY IT IN CASES SUCH AS YOURS WHERE AGENTS OF THE GOVERNMENT HAVE ERRONEOUSLY PURPORTED TO AUTHORIZE REIMBURSEMENT OF EXPENSES WHEN THEY WERE IN FACT WITHOUT AUTHORITY TO DO SO. ACCORDINGLY, WE MUST SUSTAIN OUR TRANSPORTATION AND CLAIMS DIVISION ACTION IN DISALLOWING YOUR CLAIM.

WITH REGARD TO YOUR QUERY AS TO ANY CAUSE OF ACTION YOU MAY HAVE AGAINST OFFICIALS WHO FURNISHED YOU ERRONEOUS INFORMATION, IT HAS LONG BEEN HELD THAT PUBLIC OFFICERS ARE NOT PERSONALLY LIABLE FOR MISTAKES OF EITHER FACT OR LAW IN PERFORMING ACTS IN RELATION TO MATTERS GOVERNED BY A LAWFUL REQUIREMENT OF A DEPARTMENT UNDER WHOSE AUTHORITY THE OFFICER IS ACTING. COOPER V. O'CONNOR, 107 F.2D 207, CERT. DENIED, 308 U.S. 615 (1939).

CONCERNING YOUR REQUEST FOR INFORMATION REGARDING A FURTHER APPEAL FROM OUR DECISION, YOU ARE ADVISED THAT UNDER THE LAW THE DECISIONS OF OUR OFFICE ARE FINAL AND CONCLUSIVE UPON THE EXECUTIVE BRANCH OF THE GOVERNMENT. IF YOU CARE TO PURSUE THE MATTER IN THE COURTS SEE SECTIONS 1346 AND 1491 OF TITLE 28, U.S.C. PERTAINING TO MATTERS COGNIZABLE IN THE DISTRICT COURTS OF THE UNITED STATES AND THE UNITED STATES COURT OF CLAIMS.