Matter of: W. Rex Davis, M.D. File: B-251046 Date: March 26, 1993

B-251046: Mar 26, 1993

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MILITARY PERSONNEL Pay Retirement pay Overpayments Debt collection Waiver Where retired officer was advised. Sec. 5532(e) to dual compensation statutes was lost. Overpayment of retired pay from date of such advice is not for waiver under 10 U.S.C. Even though officer had been advised that new waiver would be forthcoming because officer was partially at fault in not realizing waiver might not be granted and that he would have to repay the money. The settlement of the Claims Group allowing a partial waiver and denying waiver of the balance is affirmed. He was granted an exemption to the dual compensation statutes because of the then shortage of medical officers. Individuals who had been granted exempt status previously could retain that status unless there was a 3-day break in service.

Matter of: W. Rex Davis, M.D. File: B-251046 Date: March 26, 1993

MILITARY PERSONNEL Pay Retirement pay Overpayments Debt collection Waiver Where retired officer was advised, following a break in service, that exemption contained in 5 U.S.C. Sec. 5532(e) to dual compensation statutes was lost, overpayment of retired pay from date of such advice is not for waiver under 10 U.S.C. Sec. 2774, even though officer had been advised that new waiver would be forthcoming because officer was partially at fault in not realizing waiver might not be granted and that he would have to repay the money.

DECISION W. Rex Davis, M.D. appeals the settlement of our Claims Group of his request for waiver under 10 U.S.C. Sec. 2774 of the government's claim against him for erroneous payments made incident to his retirement from military service. The settlement of the Claims Group allowing a partial waiver and denying waiver of the balance is affirmed.

On November 1, 1979, Dr. Davis retired as a Colonel from the U.S. Army under conditions which entitled him to retired pay. Upon retirement, Dr. Davis accepted a civilian position as a medical officer with the Department of the Air Force. Pursuant to 5 U.S.C. Sec. 5532(e), he was granted an exemption to the dual compensation statutes because of the then shortage of medical officers. The authority to grant these exemptions expired on January 11, 1984. However, individuals who had been granted exempt status previously could retain that status unless there was a 3-day break in service.

Subsequently, Dr. Davis transferred in 1985 from the Department of the Air Force to the Department of the Navy without a break in service. However, on April 25, 1987, Dr. Davis resigned from his civilian Navy position and accepted another position effective June 21, 1987 with the Navy. Because of this break in service, Dr. Davis became subject to the dual compensation statutes again. He was informed that his retired pay would be reduced on December 31, 1987. He requested that the reduction in his retired pay be held in abeyance pending the granting of an exemption from the dual compensation restrictions.

Col. Davis's retired pay was not reduced in accordance with the dual compensation statutes and as a result, he was overpaid $24,486.59. It is not clear from the record whether the unreduced retired pay was paid pursuant to his request or was paid as a result of administrative error. In either event it is our view that the payments were erroneous.

Our Claims Group's settlement found that the overpayment which occurred between June 21, 1987 and December 31, 1987, following Col. Davis's first notice, dated December 21, 1987, that a break in service would result in a loss of his exempt status should be waived. However, for the period from January 1, 1988 until September 30, 1988, waiver was denied.

Under the provisions of 10 U.S.C. Sec. 2774, the Comptroller General may waive collection of certain debts where collection would be against equity and good conscience and not in the best interest of the United States, if there is no indication of fraud, misrepresentation, fault or lack of good faith on the part of the claimant. This Office has long interpreted "fault" as used in the statute as including something more than a proven overt act or omission by the member. Thus we consider "fault" to exist if in the light of all the facts it is determined that the debtor should have known or suspected an error existed and taken action to have it corrected. The standard we employ is to determine whether a reasonable person should have been aware that he was receiving a payment in excess of his proper entitlement.

In his appeal, Col. Davis requests that waiver be granted for the overpayments between January 1, 1988 and September 30, 1988, because he had no reason to believe that a new waiver would not be granted. He states that in January 1988, his wife received a telephone call from the Army Retired Pay Operations Center that a waiver had been granted retroactive to August 1987 and he felt the matter had been resolved. In March 1988, Col. Davis received a copy of the waiver and found that it applied to another Dr. Davis employed at a different agency. Col. Davis argues that he was advised at that time that another waiver was being requested and therefore, expected the matter to still be resolved in his favor. It was not until he received the notice in October 1988, that a waiver would not be forthcoming that he knew he was going to be subject to the dual compensation statutes.

We disagree. Col. Davis knew from the December 21, 1987, notice that because of the break in service he had lost his waiver and his retired pay would be subject to reduction unless another waiver was granted. Until Col. Davis received a valid waiver, in his name, it is our view that he should have realized that the possibility existed that the exemption from dual compensation restrictions would not be granted and that he would have to repay the money he received. Under these circumstances he is at least partially at fault and waiver under 10 U.S.C. Sec. 2774, can not be granted.

Dr. Davis states that the loss of his exemption to the dual compensation statutes was because he was not adequately advised of the impact a break in service would have on his status. Our only authority under the waiver statute is to waive erroneous payments where the employee or member is not at fault and such authority does not extend to the waiver of the effect of erroneous advice given by government employees.

While Col. Davis disputes the exact amount of retired pay he received and the exact amounts set off for certain periods of time listed in the Claims Group's settlement, these figures were computed based on the figures supplied to our Office by the Defense Finance and Accounting Service, Indianapolis Center (DFAS). Col. Davis should discuss this matter with the DFAS which will compute the amount owed based on the time periods for which waiver is proper. In addition, regarding a concern expressed by Col. Davis about the documents our Claims Group had before them when the settlement was issued, all documents relevant to the matter, including the brief filed by the legal assistance office, were considered in arriving at the settlement and this decision.

Date: To: Director, Claims Group/GGD - Sharon S. Green From: General Counsel - James F. Hinchman

Subject: W. Rex Davis, M.D. - Z-2916987 (B-251046)

Attached is your file Z-2916987 along with a copy of our decision W. Rex Davis, M.D., B-251046, of today's date.

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