B-141006, MAY 25, 1962
Highlights
NAVY FINANCE CENTER: REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 19. WHICH YOU SAY ARE SIMILAR TO MR. YOU REQUESTED ADVICE AS TO WHETHER YOU ARE CORRECT IN ASSUMING THAT THE VIEWS EXPRESSED IN THE LAST TWO PARAGRAPHS OF LETTER OF AUGUST 4. ARE NO LONGER TO BE FOLLOWED. THAT IS. UNDER THE SELIGA RULE DURING THE 5-YEAR PERIOD ALLOWED BY THE ACT DURING WHICH HE MIGHT HAVE CHANGED HIS OPTION. HE OBVIOUSLY WOULD HAVE CHOSEN THE SAME METHOD OF COMPUTATION WHICH HE ORIGINALLY SELECTED. HAMRICK WAS NOT ENTITLED TO CHANGE HIS ELECTION FROM OPTION (B) TO OPTION (A) UNDER SECTION 411. HAMRICK WAS ENTITLED TO RECEIVE UNDER METHOD (A) OF SECTION 511 REMAINED GREATER THAN THE AMOUNT HE WOULD HAVE BEEN ENTITLED TO RECEIVE UNDER METHOD (B) OF SECTION 511.
B-141006, MAY 25, 1962
TO DIRECTOR, TECHNICAL DIVISION, RETIRED PAY DEPARTMENT, U.S. NAVY FINANCE CENTER:
REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 19, 1962, YOUR REFERENCE XO:PH:CPM, RELATIVE TO OUR LETTER, B-141006, DATED AUGUST 4, 1961, TO KING AND KING IN WHICH WE SUSTAINED THE DISALLOWANCE BY OUR CLAIMS DIVISION OF THE CLAIM OF CHIEF WARRANT OFFICER ARLIE MARVIN HAMRICK, USN, RETIRED, 329 256, FOR INCREASED RETIRED PAY BELIEVED DUE HIM FROM OCTOBER 1, 1949, UNDER THE HOLDING IN SELIGA V. UNITED STATES, 137 CT.CL. 710, AND ALSO EXPLAINED THAT THE RULE STATED IN THE FAGAN CASE (LEWIS L. GOVER, PLAINTIFF NO. 2), CT.CL.NO. 535-57, DECIDED MAY 4, 1960, HAD NO APPLICATION TO MR. HAMRIC, SINCE IT APPLIES TO A CHANGE IN THE METHOD OF COMPUTING RETIRED PAY UNDER SECTION 511 OF THE CAREER COMPENSATION ACT OF 1949.
YOU REFERRED TO GENERAL ACCOUNTING OFFICE SETTLEMENT CERTIFICATES ISSUED IN THE CASES OF CHARLES W. HILDRETH, 172 92 16; GEORGE MARIANO, 497 84 85; SARGE D. MARTIN, 267 49 83, AND JAMES G. PEARCE, 336 37 95, WHICH YOU SAY ARE SIMILAR TO MR. HAMRICK'S CLAIM AND SUGGEST THAT SUCH SETTLEMENT INDICATE A CHANGE IN OUR POSITION IN RESPECT TO THE FAGAN (GOVER) DECISION; YOU REQUESTED ADVICE AS TO WHETHER YOU ARE CORRECT IN ASSUMING THAT THE VIEWS EXPRESSED IN THE LAST TWO PARAGRAPHS OF LETTER OF AUGUST 4, 1961, ARE NO LONGER TO BE FOLLOWED.
MR. HAMRICK EXERCISED A VALID ELECTION OF METHOD C ON THE OPTION FORM SUBMITTED TO HIM; THAT IS, HE ELECTED, UNDER SECTION 411 (B), TO RECEIVE RETIRED PAY COMPUTED UNDER METHOD (A) OF SECTION 511 OF THE 1949 ACT. HELD THAT EVEN HAD HE BEEN PROPERLY ADVISED OF HIS RIGHT, UNDER THE SELIGA RULE DURING THE 5-YEAR PERIOD ALLOWED BY THE ACT DURING WHICH HE MIGHT HAVE CHANGED HIS OPTION, HE OBVIOUSLY WOULD HAVE CHOSEN THE SAME METHOD OF COMPUTATION WHICH HE ORIGINALLY SELECTED. WE ACCORDINGLY DETERMINED THAT MR. HAMRICK WAS NOT ENTITLED TO CHANGE HIS ELECTION FROM OPTION (B) TO OPTION (A) UNDER SECTION 411, RETROACTIVELY EFFECTIVE AS OF OCTOBER 1, 1949, AFTER EXPIRATION OF THE 5-YEAR PERIOD OF LIMITATION ON ELECTIONS CONTAINED IN THE 1949 ACT MERELY BECAUSE SUBSEQUENT EVENTS (PASSAGE OF THE CAREER INCENTIVE ACT OF 1955, 69 STAT. 18, FOR EXAMPLE) MADE OPTION (A) OF SECTION 411 MORE ADVANTAGEOUS TO HIM.
SINCE THE AMOUNT MR. HAMRICK WAS ENTITLED TO RECEIVE UNDER METHOD (A) OF SECTION 511 REMAINED GREATER THAN THE AMOUNT HE WOULD HAVE BEEN ENTITLED TO RECEIVE UNDER METHOD (B) OF SECTION 511, WE POINTED OUT THAT THE RULE IN THE FAGAN (GOVER) DECISION GAVE HIM NO BENEFIT. SIMPLE STATED, WE SAID WE WOULD NOT ALLOW MR. HAMRICK TO QUALIFY FOR RETIREMENT UNDER TITLE IV OF THE 1949 ACT AND THUS UNDER THE SELIGA RULE BE ENTITLED TO INCLUDE BOTH HIS ACTIVE AND INACTIVE SERVICE CREDIT IN ESTABLISHING HIS BASIC PAY FACTOR, BUT RATHER, WE HELD HIM TO HIS ORIGINAL ELECTION. WHILE HE WAS IN THE SAME CATEGORY AS LEWIS L. GOVER, HIS PARTICULAR GRADE AND YEARS OF ACTIVE SERVICE DID NOT PERMIT HIM TO BENEFIT FROM A CHANGE OF METHODS OF COMPUTATION UNDER SECTION 511 AS PERMITTED UNDER THE FAGAN (GOVER) RULE.
IN THE MARIANO, MARTIN, AND PEARCE CASES, IN WHICH THE MEMBERS ELECTED OPTION (B) OF SECTION 411 AND UNDER THE 1955 ACT, COMPUTATION OF THEIR RETURNED PAY UNDER METHOD (B) OF SECTION 511 RESULTED IN A GREATER RETURN. THEREFORE, UNDER THE RULE IN THE FAGAN (GOVER) CASE, THE SETTLEMENTS ISSUED TO ADJUST THEIR RETIRED PAY UNDER THAT COURT DECISION WERE CORRECT AND FUTURE PAYMENTS OF RETIRED PAY TO THEM SHOULD BE BASED UPON METHOD (B) OF SECTION 511 OF THE 1949 ACT.
THE CASE OF CHARLES W. HILDRETH INVOLVES A SOMEWHAT DIFFERENT SITUATION. MR. HILDRETH ELECTED, UNDER OPTION (A) OF SECTION 411, TO RECEIVE RETIRED PAY COMPUTED ON A YEARS-OF-SERVICE BASIS UNDER SECTION 402 (D) OF THE CAREER COMPENSATION ACT OF 1949. HOWEVER, HE WAS A PLAINTIFF IN CARL ABRAMS, ET AL. V. UNITED STATES, CT.CL.NO. 248-52, IN WHICH HE OBTAINED A SANDERS-TYPE JUDGMENT ON FEBRUARY 3, 1953, WHICH 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 SEPTEMBER 30, 1949, EXCEPT FOR ANY PAYMENT WHICH MAY HAVE BEEN MADE TO HIM PURSUANT TO OUR SETTLEMENT OF AUGUST 31, 1961, IN THE AMOUNT OF $399. THAT SETTLEMENT WAS ERRONEOUS AS INDICATED IN THE U.S. NAVY FINANCE CENTER LETTER OF DECEMBER 15, 1961 (YOUR REFERENCE XHA:CL:32 172 96 16), FROM THE RETIRED PAY DEPARTMENT (XHA) SINCE IT WAS BASED ON 21 YEARS OF ACTIVE SERVICE RATHER THAN THE CORRECT FIGURE OF 20 YEARS OF ACTIVE SERVICE. HIS ELECTION TO RECEIVE RETIRED PAY UNDER SECTION 511 (OPTION (B) OF SECTION 411) IS BINDING AND HIS CURRENT RETIRED PAY MUST BE COMPUTED UNDER THAT SECTION. HE IS NOT ELIGIBLE TO HAVE HIS RETIRED PAY COMPUTED UNDER THAT SECTION 402 OF THE CAREER COMPENSATION ACT AND HENCE IS NOT ENTITLED TO THE BENEFITS OF THE SELIGA DECISION.
IT IS HOPED THAT THIS SERVES THE PURPOSE OF YOUR INQUIRY AND ESTABLISHES OUR POSITION IN THE CASES TO WHICH YOUR LETTER REFERRED.