B-141006, JUL. 18, 1962

B-141006, JUL. 18, 1962

TO KING AND KING, ATTORNEYS AT LAW:

YOUR LETTER OF JUNE 7, 1962, REQUESTS RECONSIDERATION OF THE ACTION TAKEN IN OUR CLAIMS DIVISION LETTER DATED JUNE 5, 1962, REJECTING THE CLAIM MADE NOVEMBER 20, 1961, ON BEHALF OF CHARLES WILLIAM HILDRETH FOR INCREASED RETIRED PAY BELIEVED DUE HIM FROM JULY 1, 1952, UNDER THE HOLDING IN THE CASE OF SELIGA V. UNITED STATES, 137 CT.CL. 710.

YOUR REQUEST FOR RECONSIDERATION IS BASED ON THE PREMISE THAT MR. HILDRETH'S ELECTION TO RECEIVE RETIRED PAY UNDER METHOD (A) OF SECTION 511 OF THE CAREER COMPENSATION ACT OF 1949, APPROVED OCTOBER 12, 1949, CH. 681, 63 STAT. 829, IS NOT BINDING IN HIS CASE BECAUSE IT IS WELL SETTLED THAT SUCH ELECTIONS ARE NOT BINDING IF BASED UPON ERRONEOUS INFORMATION FURNISHED TO THE INDIVIDUALS CONCERNED BY THE ADMINISTRATIVE DEPARTMENT. WHILE WE HAVE AGREED TO FOLLOW THAT RULE, YOU HAVE FURNISHED NO INFORMATION WHICH SHOWS THAT IT IS APPLICABLE IN THIS CASE.

AS WAS POINTED OUT IN THE CLAIMS DIVISION LETTER OF JUNE 5, 1962, THE RECORDS SHOW THAT MR. HILDRETH ELECTED UNDER OPTION (A) OF SECTION OF SERVICE BASIS UNDER SECTION 402 (D) OF THAT ACT. HOWEVER, HE WAS PLAINTIFF NO. 130 IN THE CASE OF ABRAMS V. UNITED STATES. CT.CL.NO. 248- 52 IN WHICH HE OBTAINED A SANDERS TYPE JUDGMENT ON FEBRUARY 3, 1953. SO REQUESTING AND ACCEPTING PAYMENT ON A SAVED PAY BASIS, HE, IN EFFECT, CHANGED HIS ORIGINAL ELECTION TO OPTION (B) OF SECTION 411. HE HAS RECEIVED HIS RETIRED PAY ON THAT BASIS UNDER THE PROVISIONS OF METHOD (A) OF SECTION 511 CONTINUOUSLY SINCE OCTOBER 1, 1949, EXCEPT FOR THE PAYMENT MADE TO HIM PURSUANT TO SETTLEMENT DATED AUGUST 31, 1961, IN THE AMOUNT OF $399.

MR. HILDRETH'S CASE PARALLELS THAT OF MR. ARLIE MARVIN HAMRICK AND, UNDER THE REASONING OF OUR DECISION, B-141006, DATED AUGUST 4, 1961, CITED IN YOUR LETTER OF JUNE 7, 1962, THERE IS NO BASIS FOR ALLOWING HIM THE BENEFITS OF THE SELIGA DECISION. WHILE IT APPEARS THAT HE IS IN THE SAME CATEGORY AS LOUIS L. GOVER (PLAINTIFF NO. 2 IN THE CASE OF FAGAN, ET AL. V. UNITED STATES, CT.CL.NO. 535-57, MAY 4, 1960), HIS PARTICULAR GRADE AND YEARS OF ACTIVE SERVICE DO NOT PERMIT HIM TO BENEFIT FROM A CHANGE OF METHOD OF COMPUTATION UNDER THE FAGAN (GOVER) RULE. WHILE HIS RETIRED PAY COMMENCING APRIL 1, 1955, UNDER SECTION 511 (B) WOULD HAVE BEEN $152.10 (50 PERCENT OF $304.20, GRADE E-7 WITH OVER 18 YEARS' SERVICES), HE WAS PAID AT THE RATE OF $154.61 COMMENCING ON THAT DATE.

RETIRED PAY WAS PAID TO MR. HILDRETH IN THE FOLLOWING AMOUNTS COMMENCING OCTOBER 1, 1949, $147.26; MAY 1, 1952, $153.15; AND JULY 1, 1952, $145.86. HIS PAY UNDER THE SELIGA RULE WOULD HAVE BEEN BUT $139.65 COMMENCING OCTOBER 1, 1949, AND $145.23 EFFECTIVE APRIL 1, 1952. EXERCISED HIS RIGHT OF ELECTION TO RECEIVE SAVED PAY (OPTION (B), SECTION 411, SUPRA) UNDER THE SANDERS TYPE SUIT AND, DURING THE FIVE-YEAR PERIOD PRIOR TO OCTOBER 1, 1954, WITHIN WHICH HE WAS PERMITTED TO CHANGE HIS ELECTION UNDER THAT SECTION, THAT ELECTION WAS CLEARLY TO HIS ADVANTAGE. NOT ONLY DID SUCH ELECTION GIVE HIM THE HIGHEST RATE OF PAY, BUT HIS SAVED PAY WAS WHOLLY EXEMPT FROM FEDERAL INCOME TAX WHEREAS RETIRED PAY COMPUTED ON THE YEARS OF SERVICE BASIS OF SECTION 402 (D) (1) WAS ONLY EXEMPT TO THE EXTENT OF THE AMOUNT WHICH WOULD HAVE BEEN PAYABLE BASED UPON HIS PERCENTAGE OF DISABILITY. IT IS OBVIOUS THAT NO INFORMATION WHICH COULD THEN HAVE BEEN FURNISHED WOULD HAVE INDUCED HIM TO CHANGE HIS ELECTION FROM 411 (B) TO 411 (A) PRIOR TO THE EFFECTIVE DATE OF THE CAREER INCENTIVE ACT OF 1955, APPROVED MARCH 31, 1955, CH. 20, 69 STAT. 18, WHICH WAS SUBSEQUENT TO THE TIME HIS RIGHT OF ELECTION UNDER SECTION 411 EXPIRES. THUS, THE RULE PERMITTING RESCISSION OF AN ELECTION INDUCED BY AN ERRONEOUS CONSTRUCTION OF THE LAW OR MISINFORMATION CAN HAVE NO EFFECT IN THIS CASE.

YOU REQUEST THAT THE CURRENT COMPUTATION OF MR. HILDRETH'S ACTIVE SERVICE BY OUR CLAIMS DIVISION BE VERIFIED, SINCE A REPORT FURNISHED YOU BY THE NAVY FINANCE CENTER IN CONNECTION WITH HIS SANDERS TYPE SUITSHOWS HE WAS CREDITED WITH 20 YEARS, 7 MONTHS AND 6 DAYS OF ACTIVE SERVICE. IN LETTER FROM THAT AGENCY DATED SEPTEMBER 4, 1952, FURNISHING THE COMPUTATION OF THE AMOUNT DUE UNDER THE SANDERS TYPE JUDGMENT, MR. HILDRETH'S SERVICE FOR PAY ON DATE OF TRANSFER TO THE FLEET RESERVE WAS SHOWN AS 16 YEARS, 3 MONTHS AND 4 DAYS AND HIS ACTIVE SERVICE SUBSEQUENT TO TRANSFER WAS SHOWN AS 4 YEARS, 4 MONTH AND 2 DAYS. HOWEVER, SUCH TOTAL SERVICE OF 20 YEARS, 7 MONTHS AND 6 DAYS WAS NOT ALL ACTIVE SERVICE SINCE OTHER INFORMATION OF RECORD HERE SHOWS THAT 1 MONTH AND 16 DAYS OF SUCH SERVICE FROM NOVEMBER 16, 1919, TO JANUARY 1, 1920, WAS INACTIVE SERVICE IN THE NAVAL RESERVE. HIS ACTUAL ACTIVE SERVICE FOR PERCENTAGE MULTIPLE PURPOSES UNDER SECTION 511 (B) WAS ONLY 20 YEARS, 5 MONTHS AND 20 DAYS. HENCE, IT IS CLEAR THAT THE SETTLEMENT DATED AUGUST 31, 1961, ADJUSTING MR. HILDRETH'S RETIRED PAY UNDER THE FAGAN (GOVER) RULE ON THE BASIS OF 21 YEARS OF ACTIVE SERVICE WAS ERRONEOUS. ACCORDINGLY, HE SHOULD REFUND THE AMOUNT OF $399 HE RECEIVED UNDER THAT SETTLEMENT.

PAYMENT SHOULD BE MADE BY CHECK OR MONEY ORDER PAYABLE TO "U.S. GENERAL ACCOUNTING OFFICE" AND FORWARDED TO THE FOLLOWING ADDRESS:

U.S. GENERAL ACCOUNTING OFFICE

POST OFFICE BOX 2610

WASHINGTON 13, D.C.

REFERENCE TO FILE Z-1354798 SHOULD BE SHOWN IN ANY CORRESPONDENCE IN CONNECTION WITH THIS INDEBTEDNESS.