B-203667, FEB 9, 1982

B-203667: Feb 9, 1982

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DIGEST: EMPLOYEE WAS REMOVED FROM JOB AT SMALL BUSINESS ADMINISTRATION FOR MAKING ALLEGEDLY FALSE STATEMENTS CONCERNING CLAIM FOR TEMPORARY QUARTERS SUBSISTENCE EXPENSES. HE APPEALS CLAIMS DIVISION'S DENIAL OF CLAIM ON BASIS OF COURT OF CLAIMS DECISION THAT HIS REMOVAL WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. COURT DID NOT DECIDE WHETHER QUARTERS WERE TEMPORARY OR NOT BUT ONLY DECIDED THERE WAS NO SUBSTANTIAL EVIDENCE TO SHOW HE HAD SUBMITTED FRAUDULENT CLAIMS. SINCE THE RECORD SHOWS CONFLICTING EVIDENCE AS TO WHETHER QUARTERS WERE TEMPORARY. THE MATTER IS STILL DOUBTFUL AND THE CLAIM IS DENIED. J. FRED DUVALL - TEMPORARY QUARTERS SUBSISTENCE EXPENSES: THIS DECISION IS IN RESPONSE TO AN APPEAL BY MR.

B-203667, FEB 9, 1982

DIGEST: EMPLOYEE WAS REMOVED FROM JOB AT SMALL BUSINESS ADMINISTRATION FOR MAKING ALLEGEDLY FALSE STATEMENTS CONCERNING CLAIM FOR TEMPORARY QUARTERS SUBSISTENCE EXPENSES. HE APPEALS CLAIMS DIVISION'S DENIAL OF CLAIM ON BASIS OF COURT OF CLAIMS DECISION THAT HIS REMOVAL WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. COURT DID NOT DECIDE WHETHER QUARTERS WERE TEMPORARY OR NOT BUT ONLY DECIDED THERE WAS NO SUBSTANTIAL EVIDENCE TO SHOW HE HAD SUBMITTED FRAUDULENT CLAIMS. SINCE THE RECORD SHOWS CONFLICTING EVIDENCE AS TO WHETHER QUARTERS WERE TEMPORARY, THE MATTER IS STILL DOUBTFUL AND THE CLAIM IS DENIED.

J. FRED DUVALL - TEMPORARY QUARTERS SUBSISTENCE EXPENSES:

THIS DECISION IS IN RESPONSE TO AN APPEAL BY MR. J. FRED DUVALL FROM OUR CLAIMS DIVISION'S (NOW CLAIMS GROUP) SETTLEMENT OF AUGUST 28, 1978, BY WHICH HIS CLAIM FOR TEMPORARY QUARTERS SUBSISTENCE EXPENSES WAS DENIED.

IN FEBRUARY 1976, MR. DUVALL, WHO IS A LOAN SPECIALIST, WAS TRANSFERRED FROM THE DISTRICT OFFICE OF THE SMALL BUSINESS ADMINISTRATION IN NEW ORLEANS, TO THE DISTRICT OFFICE IN SAN FRANCISCO. AT ISSUE IN THIS CASE IS WHETHER THE RESIDENCE TO WHICH HE MOVED SOON AFTER ARRIVING IN SAN FRANCISCO, AND WHICH BECAME HIS PERMANENT RESIDENCE, MAY BE CONSIDERED TEMPORARY FOR PURPOSES OF ALLOWING TEMPORARY QUARTERS SUBSISTENCE EXPENSES.

PARAGRAPH 2-5.2F OF THE FEDERAL TRAVEL REGULATIONS (FTR) (FPMR 101 7, MAY 1973) PROVIDES IN PART THAT, " *** THE PERIOD OF ELIGIBILITY SHALL TERMINATE WHEN THE EMPLOYEE OR ANY MEMBER OF HIS IMMEDIATE FAMILY OCCUPIES PERMANENT RESIDENCE QUARTERS ***." IN OUR DECISIONS WE HAVE HELD THAT THE DETERMINATION AS TO WHETHER QUARTERS ARE TEMPORARY IS BASED ON THE INTENT OF THE EMPLOYEE AT THE TIME HE MOVES INTO THE QUARTERS. THUS, IN CERTAIN CASES, PAYMENT OF TEMPORARY QUARTERS EXPENSES HAS BEEN ALLOWED WHERE THE EMPLOYEE MANIFESTED AN INTENT TO OCCUPY QUARTERS ONLY TEMPORARILY, EVEN THOUGH SUCH QUARTERS SUBSEQUENTLY BECAME PERMANENT. 53 COMP.GEN. 508 (1974).

THERE IS A DISPUTE AS TO MR. DUVALL'S INTENT REGARDING THE RESIDENCE FOR WHICH HE CLAIMS TEMPORARY QUARTERS SUBSISTENCE EXPENSES. MR. DUVALL CLAIMS THAT HE INITIALLY REACHED AN ORAL AGREEMENT WITH THE LANDLORD OF THE PREMISES IN QUESTION TO RENT FOR 3 MONTHS AT $650 A MONTH. HE SAYS HE DESIRED A LONGER LEASE BUT THE LANDLORD DID NOT WISH TO COMMIT HIMSELF TO A LONGER PERIOD BECAUSE HE WAS CONSIDERING SELLING THE PREMISES. IN THIS REGARD MR. DUVALL INCLUDED A COPY OF AN UNDATED LETTER SIGNED BY THE LANDLORD WHICH READS AS FOLLOWS:

"THIS WILL ACKNOWLEDGE RECEIPT OF $650.00 AS RENT FOR FEBRUARY 27, 1976 THROUGH MARCH 31, 1976. AGREE TO RENT FOR $650.00 ON A MONTH TO MONTH BASIS FOR THREE MONTHS TO ALLOW YOU TO DECIDE TO BUY THIS PROPERTY OR LEASE IT ON A TWO YEAR LEASE. YOUR OPTION TO BUY EXPIRES MARCH 31, 1976, AND YOUR LEASE OPTION EXPIRES MAY 30, 1976. SHOULD YOU DESIRE A PERMANENT LEASE FOR TWO YEARS THE MONTHLY RENTAL SHALL BE $400.00 A MONTH PLUS ANY INCREASE IN TAXES AFTER THE FIRST YEAR."

AT THE BOTTOM OF THIS LETTER IS A COPY OF A CANCELLED CHECK IN THE AMOUNT OF $650 MADE OUT TO THE LANDLORD, DATED MARCH 12, 1976, AND SIGNED BY MR. DUVALL.

MR. DUVALL STATED THAT DURING THIS TIME HE MADE ATTEMPTS TO LOCATE OTHER PERMANENT HOUSING AND HE HAS PRESENTED COPIES OF SEVERAL OFFERS TO LEASE OR BUY OTHER RESIDENCES. AROUND THE END OF MARCH, HOWEVER, MR. DUVALL STATES THAT HE AND HIS LANDLORD REACHED ANOTHER ORAL AGREEMENT WHEREBY THE LANDLORD AGREED TO RENT THE HOUSE TO MR. DUVALL ON A MONTH-TO-MONTH BASIS AT $400 PER MONTH.

IN MAKING HIS CLAIM BEFORE THIS OFFICE FOR TEMPORARY QUARTERS SUBSISTENCE EXPENSES, MR. DUVALL REPORTED IN HIS LETTER OF SEPTEMBER 19, 1977, THAT "THE LANDLORD REMOVED HIS FURNITURE AND WE HAD OURS DELIVERED AND SIGNED A 2-YEAR LEASE." SUBSEQUENTLY, IN MARCH 1978, THE CHIEF OF THE FISCAL BRANCH OF THE SBA REFERRED MR. DUVALL'S CASE TO THE DIRECTOR, SECURITY AND INVESTIGATION DIVISION, SBA, BECAUSE WHILE MR. DUVALL CLAIMED TEMPORARY QUARTERS SUBSISTENCE EXPENSES FROM FEBRUARY 27 TO MARCH 27, 1976, THE CHECK HE PRESENTED TO DOCUMENT HIS EXPENSES WAS DATED MARCH 12, 1976.

THE INVESTIGATOR ASSIGNED TO MR. DUVALL'S CASE INTERVIEWED MR. DUVALL, THE LANDLORD, AND THE REALTOR INVOLVED. ACCORDING TO THE INVESTIGATOR'S REPORT OF HIS INTERVIEWS, SENT TO GAO IN RESPONSE TO OUR CLAIMS DIVISION'S REQUEST FOR AN AGENCY REPORT, THE LANDLORD STATED THAT THE PREMISES HAD NOT BEEN RENTED ON A MONTH-TO-MONTH BASIS, THERE WAS NO 3-MONTH TRIAL PERIOD, AND THE RENT HAD ALWAYS BEEN $400 A MONTH. HE ALSO SAID THAT WHEN HE SIGNED THE LETTER, QUOTED ABOVE, WHICH WAS SUBMITTED TO HIM BY MR. DUVALL, HE DID NOT READ IT AND SIGNED IT BELIEVING IT TO BE MERELY A RECEIPT FOR $650. THE REALTOR STATED THAT THE $650 PAYMENT REPRESENTED $400 AS RENT AND A $250 SECURITY DEPOSIT. HE ALSO STATED THAT BOTH PARTIES SIGNED A 2-YEAR LEASE WITH AN OPTION TO RENEW FOR 1 YEAR. THE INVESTIGATOR STATED THAT DURING THE INTERVIEW MR. DUVALL TOLD HIM THAT NO WRITTEN LEASE EXISTED.

BASED ON THE RESULTS OF THIS INVESTIGATION, THE SBA GAVE MR. DUVALL ADVANCE NOTICE OF A PROPOSED TERMINATION FOR VIOLATION OF SBA STANDARDS OF CONDUCT, CHARGING HIM WITH (1) MAKING FALSE STATEMENTS AND FALSIFYING RECORDS IN HIS CLAIM FOR REIMBURSEMENT FOR TEMPORARY QUARTERS AND (2) MAKING FALSE STATEMENTS TO SBA INVESTIGATORS DURING THE COURSE OF AN OFFICIAL INVESTIGATION. MR. DUVALL WAS REMOVED FROM THE SBA AND HE APPEALED THIS DECISION TO THE MERIT SYSTEMS PROTECTION BOARD (MSPB), WHICH UPHELD THE REMOVAL IN A DECISION DATED OCTOBER 23, 1979.

MR. DUVALL FILED SUIT IN THE COURT OF CLAIMS, CHALLENGING MSPB'S DECISION. THE COURT, IN A DECISION OF APRIL 22, 1981, HELD THAT THERE WAS NO SUBSTANTIAL EVIDENCE TO SUPPORT MSPB'S DECISION UPHOLDING THE REMOVAL OF MR. DUVALL FOR FILING A FALSE CLAIM, AND IT ORDERED HIS REINSTATEMENT. IN LIGHT OF THIS DECISION, MR. DUVALL HAS ASKED WHETHER THE DETERMINATION OF OUR CLAIMS DIVISION MAY BE CHANGED.

THE COURT FOUND THAT MSPB'S DECISION WAS BASED ON HEARSAY EVIDENCE SUBMITTED BY THE SBA'S INVESTIGATOR. ONE FACTOR WHICH LED THE COURT TO OVERRULE MSPB'S DECISION WAS THE COURT'S DETERMINATION THAT THE INVESTIGATOR'S EVIDENCE WAS QUESTIONABLE BECAUSE OF THE TECHNIQUES HE USED AND BECAUSE SOME OF THE EVIDENCE WAS REPUDIATED BY THOSE HE INTERVIEWED. APPARENTLY THE INVESTIGATOR DESTROYED HIS HANDWRITTEN FIELD NOTES AND NARRATIVE AND SUBMITTED A TYPED VERSION OF HIS INTERVIEWS WITH THE LANDLORD AND THE REALTOR. THE LANDLORD REFUSED TO SIGN THE SUMMARY MADE OF HIS INTERVIEW AND IN A LATER DEPOSITION SAID THE SUMMARY WAS AN INCORRECT ACCOUNT OF THE INTERVIEW AND ALSO STATED THAT THE PARTIES DID NOT TREAT THE MARCH 13, 1976, DOCUMENT AS A LEASE. THE REALTOR SIGNED A STATEMENT SUBMITTED BY THE INVESTIGATOR BUT LATER STATED THAT HE FELT THE INVESTIGATOR WAS ATTEMPTING TO TRICK HIM WITH HIS QUESTIONS AND THAT THE INVESTIGATOR MISINTERPRETED HIS ANSWERS.

THE COURT ALSO FOUND THAT THE PROBATIVE VALUE OF THE INVESTIGATOR'S HEARSAY EVIDENCE WAS LESSENED BECAUSE THE HEARING OFFICER TO WHOM THE EVIDENCE WAS PRESENTED DIED BEFORE RENDERING HIS DECISION AND, THEREFORE, NO CREDIBILITY DETERMINATION WAS MADE. THE COURT THEN HELD THAT:

"*** IN A CASE OF EMPLOYEE MISCONDUCT IN FILING OF FALSE DOCUMENTS, OUR CASES REQUIRE AS PART OF THE SUBSTANTIAL EVIDENCE A SHOWING THAT THE FALSITY WAS WILLFUL, AND THUS A FALSITY THAT COULD HAVE BEEN INNOCENT OR INADVERTENT IS INSUFFICIENT. *** THUS, IN THE ABSENCE OF ANY CREDIBILITY DETERMINATIONS BY A TRIER OF FACT WHO COULD OBSERVE *** DEMEANOR, AND ON THE BASIS OF DUVALL'S TESTIMONY AND THE STATEMENTS OF THE LANDLORD AND THE REALTOR TAKEN AFTER THE HEARING WHEN WEIGHED AGAINST THE HEARSAY EVIDENCE OF THE INVESTIGATOR, THIS COURT CONCLUDES THAT THE EVIDENCE RELIED UPON BY THE BOARD IN REACHING ITS DECISION WAS NOT SUBSTANTIAL. ADMITTEDLY, THERE IS AN INCONSISTENCY BETWEEN DUVALL'S LETTER TO THE COMPTROLLER GENERAL WHEREIN HE STATED HE SIGNED A LEASE AND HIS TESTIMONY THAT THE MARCH 13, 1976, DOCUMENT WAS NOT A LEASE BUT A COUNTEROFFER. THAT INCONSISTENCY, ALONE, HOWEVER, SHOWS CONFUSION BUT IS NOT SUFFICIENT TO SUPPORT CHARGES OF FILING A FALSE CLAIM. THE RECORD DISCLOSES THAT THIS CASE ACTUALLY INVOLVES A QUESTION OF DIFFERING INTERPRETATIONS OF TRAVEL REGULATIONS WHICH WERE NOT READILY UNDERSTANDABLE BY DUVALL OR EVEN BY US, AS TO A MOST MATERIAL POINT. THE SBA DID NOT PRESENT SUFFICIENT CREDIBLE EVIDENCE TO SHOW ANYTHING MORE THAN AN HONEST DISPUTE. *** WE ARE, FORTUNATELY FOR US, NOT REQUIRED TO FIND THE FACTS, TO DECIDE WHETHER THE QUARTERS WERE TEMPORARY, WHETHER DUVALL GOT INTO THE WEB HE WAS TANGLED IN BY PRACTICING TO DECEIVE, OR WHETHER HE OR THE INVESTIGATOR WAS TELLING THE TRUTH IF EITHER WAS. ALL WE ARE SAYING IS THAT THE IGNOMINIOUS TERMINATION OF A GOVERNMENT CAREER FOR FALSE CLAIMS MUST BE SUPPORTED BY EVIDENCE MORE SUBSTANTIAL THAN THAT WHICH SATISFIED THE BOARD IN THIS CASE." DUVALL V. UNITED STATES, CT.CL. NO. 186-80C, SLIP OPINION AT 9, 10 (APRIL 22, 1981).

THE DECISION OF THE COURT OF CLAIMS DOES NOT CAUSE US TO CHANGE THE RESULT REACHED BY OUR CLAIMS DIVISION. THE COURT DECLINED TO DECIDE WHETHER THE QUARTERS MR. DUVALL OCCUPIED WERE TEMPORARY OR PERMANENT. THE COURT MERELY HELD THAT THE EVIDENCE WAS NOT SUFFICIENT FOR THE MERIT SYSTEMS PROTECTION BOARD TO HAVE UPHELD MR. DUVALL'S DISMISSAL ON THE BASIS OF FILING A FALSE CLAIM.

IN DETERMINING WHETHER TO ALLOW AN EMPLOYEE'S CLAIM, HOWEVER, A DIFFERENT STANDARD OF PROOF IS USED BY THIS OFFICE. IT IS INCUMBENT ON THE CLAIMANT TO PROVE THE LIABILITY OF THE UNITED STATES AND THE CLAIMANT'S RIGHT TO PAYMENT. SEE 4 C.F.R. SEC. 31.7 (1981). IN HAROLD E. RICHARDS, B-199263, FEBRUARY 4, 1981, WE STATED THAT " *** WHERE AN ADMINISTRATIVE AGENCY AND A CLAIMANT DISAGREE AS TO THE FACTS IN A CASE, IT IS OUR POLICY TO ACCEPT THE FACTS AS PRESENTED BY THE AGENCY IN THE ABSENCE OF CLEAR AND CONVINCING PROOF TO THE CONTRARY."

AS THE COURT OF CLAIMS POINTED OUT, MR. DUVALL STATED TO THIS OFFICE THAT HE HAD SIGNED A 2-YEAR LEASE. THE DOCUMENTARY EVIDENCE BEFORE THIS OFFICE THEREFORE, SHOWING A LEASE AGREEMENT BETWEEN MR. DUVALL AND HIS LANDLORD AT A RENTAL OF $400 A MONTH WITH A $250 SECURITY DEPOSIT, WOULD SUPPORT THAT WRITTEN STATEMENT OF MR. DUVALL'S TO US EVEN THOUGH HE SUBSEQUENTLY STATED THAT THERE REALLY WAS NO LEASE AND HE RENTED MONTH-TO-MONTH. WHILE THE EVIDENCE MAY NOT SUPPORT THE FINDING THAT MR. DUVALL SUBMITTED A FRAUDULENT CLAIM, THE CONTRADICTORY EVIDENCE DOES SHOW THAT THE CLAIM IS DOUBTFUL.

MR. DUVALL HAS NOT PRESENTED CLEAR AND CONVINCING EVIDENCE SUFFICIENT TO ESTABLISH THAT THE QUARTERS HE OCCUPIED WERE TEMPORARY. AS A RESULT MR. DUVALL IS NOT ENTITLED TO TEMPORARY QUARTERS SUBSISTENCE EXPENSES SINCE HE HAS NOT SHOWN THE QUARTERS HE PERMANENTLY OCCUPIED WERE AT ONE TIME OCCUPIED BY HIM ON A TEMPORARY BASIS WITHIN THE MEANING OF THE FEDERAL TRAVEL REGULATIONS. LANDINGS AWAY FROM THE MEMBER'S PERMANENT DUTY STATION WOULD BE REQUIRED, AND THE TRAVEL IS BEGUN BUT NOT COMPLETED DUE TO WEATHER CONDITIONS, THE MEMBER SHOULD BE CONSIDERED IN A TRAVEL STATUS REGARDLESS OF WHETHER HE WAS ABLE TO MAKE A LANDING AWAY FROM HIS PERMANENT STATION. COMPARE 52 COMP.GEN. 452 (1973).

ACCORDINGLY, SETTLEMENT MAY BE MADE WITH COLONEL GRIFFIN FOR THE COST OF AIRPLANE RENTAL, IF OTHERWISE CORRECT. THE VOUCHER ACCOMPANYING THE SUBMISSION IS BEING RETURNED TO THE FINANCE AND ACCOUNTING OFFICER FOR PAYMENT.