B-214289 October 23, 1985
B-214289: Oct 23, 1985
Bank is advised that interest is recoverable only under statute or contract. Which this was not. You wrote to our Claims Group in connection with a delayed payment to the Andre Robinson Trust which your bank is administering #347-1192509). As we will explain below. We must advise that there is no basis for any further payment. 000 was to be paid jointly to three attorneys for attorneys fees and costs. 000 was to be paid to the Rainier National Bank as Trustee of the Andre Robinson Living Trust. The Army's payment request was dated August 16. Was received by our Claims Group on August 19. It was brought to our attention that we had not simultaneously certified the larger payment on behalf of Andre Robinson.
B-214289 October 23, 1985
Army settled personal injury claim under 10 U.S.C. Sec. 2733. Settlement called for lump-sum payment plus establishment of trust. GAO issued Settlement Certificate for trust payment approximately a month after the lump-sum payment. Trustee bank seeks interest on the trust amount for the month's "delay." Bank is advised that interest is recoverable only under statute or contract, and delay in payment, even if unreasonable, which this was not, does not create entitlement to interest. See ct. cases cited.
Mr. Thomas J. Peterson Assistant Vice President and Trust Branch Manager Rainier National Bank Olympia Office - Trust Division 402 Capitol Way P.O. Box 288 Olympia, Washington 98507
Dear Mr. Peterson:
Some time ago, you wrote to our Claims Group in connection with a delayed payment to the Andre Robinson Trust which your bank is administering #347-1192509). We sincerely regret this additional delay in responding to your letter. However, as we will explain below, we must advise that there is no basis for any further payment.
To briefly recapitulate, Jimmie L. Robinson, individually and as parent of Andre S. Robinson, submitted claims with the Department of the Army for personal injuries suffered by Andre Robinson at an Army medical facility in Germany. The Army settled the claims under the authority of 10 U.S.C. Sec. 2733. The settlement provided for the payment of (a) $100,000 to Jimmie L. Robinson, and (b) a total of $1,600,000 on behalf of Andre Robinson, of which $340,000 was to be paid jointly to three attorneys for attorneys fees and costs, and $1,260,000 was to be paid to the Rainier National Bank as Trustee of the Andre Robinson Living Trust.
Under the law then in effect, the Army paid $25,000 to Jimmie L. Robinson, $25,000 to the attorneys, and submitted documentation of the balance to the General Accounting Office for payment in accordance with 31 U.S.C. Sec. 1304. The Army's payment request was dated August 16, 1983, and was received by our Claims Group on August 19. On September 19, 1983, our Claims Group certified payment of the $75,000 to Jimmie L. Robinson. Shortly thereafter, it was brought to our attention that we had not simultaneously certified the larger payment on behalf of Andre Robinson. Our Claims Group did this on October 13, 1983, and we understand that the checks were dated October 20. You have suggested that the Bank could have earned at least $9,450 in interest on the trust amount during the approximately 1-month period between our two certifications. In effect, you are seeking interest on the $1,260,000 for the month's "delay in payment."
The applicable principle of law is that interest on unpaid obligations is not recoverable against the United States unless expressly authorized by statute or contract. More specifically as relevant to this situation, the courts, including the Supreme Court, have frequently noted that delay by the United States in making payment, even if that delay can be termed unreasonable (which, as we will explain below, we do not think was the case here), does not create an entitlement to interest. United States v. N.Y. Ryanon Importing Co., 329 U.S. 654, 660 (1947); Albrecht v. United States, 329 U.S. 599, 605 (1947); Tillson v. United States, 100 U.S. 43 (1879); Gray v. Dukedom Bank, 216 F.2d 108, 110 (6th Cir. 1954); Muenich v. United States, 410 F. Supp. 944, 947 (N.D.Ind. 1976); United States v. James, 301 F. Supp. 107, 132 (W.D.Tex. 1969); Economy Plumbing & Heating Co. v. United States, 470 F.2d 585, 594 (Ct. C1. 1972). There is no provision for interest in 10 U.S.C. Sec. 2733 or in any other applicable statute.
We point out for your information that, until recent years, the payments in the Andre Robinson case, except for the two $25,000 payments made directly by the Army, would have required a specific congressional appropriation, a process which normally took 6 months to a year and sometimes longer. Interest did not accrue during this delay. The law was amended in 1978, with GAO'S support, to considerably expedite the payment process by authorizing GAO to certify payment under the permanent authority of 31 U.S.C. Sec. 1304.
When processing payments under 31 U.S.C. Sec. 1304, it is our goal, resources permitting, to issue our certification documents within approximately 30 days after receipt of all necessary information. For any number of reasons, this does not always happen. In this case, although there is no legal requirement that the claims be processed simultaneously, as soon as it was brought to our attention that both claims had not been processed together, our Claims Group acted promptly to make the second certification. As noted earlier, we received the Army's payment request on August 19, 1983, and the second set of checks was dated October 20. Considering the large volume of work our Claims Group is required to handle, we do not think that a period of approximately 60 days to process payments totalling $1.7 million is unreasonable.
Finally, we note that, under 10 U.S.C. Sec. 2733(e), amounts tendered in payment must be accepted in "full satisfaction" of the claims.
In closing, our review of the matter leads us to conclude that the claimants have received everything to which they are legally entitled, they received it without excessive or unreasonable delay in the payment process (the fact that the settlement process may have taken 7 years has no bearing on the payment process), and there is no authority for any further payment.
(Mrs.) Rollee H. Efros Associate General Counsel