In the Matter of the Petition by:

LESLIE H. ELDREDGE, RR 2,
Box 338-BB,
at
Norwich, NY 13815-9689

P.S. Docket No. AO-7

1/25/91

Cohen, James. A., Judicial Officer

APPEARANCE FOR PETITIONER: John D. Cameron, Esq.,
Clippinger Law Offices, P.O. Box 542, 13 S. Main Street,
New Berlin, NY 13411-0542

APPEARANCE FOR RESPONDENT: Andrew C. Jagusiak, Esq.,
Inspection Service, United States Postal Service,
Washington, DC 20260-2181

Postal Service Decision

The Inspection Service, United States Postal Service (Respondent) has filed an appeal from an Initial Decision in which an Administrative Judge found that Petitioner was indebted to the United States Postal Service in the amount of $2,768.59 as the result of a shortage in the main stamp stock at the Norwich New York Post Office. Respondent contends that Petitioner is indebted to the Postal Service in the amount of $4,200 and that the Administrative Judge erred in crediting Petitioner with unexplained overages of $1,431.41. Petitioner opposes Respondent's appeal.

Background

In the Initial Decision, the Administrative Judge found that postage stock valued at $4,200 was shipped from a postal distribution center to the Norwich New York Post Office on September 30, 1987 (I.D. Finding of Fact (FOF) 7). Petitioner, who was the main stamp stock custodian at the Norwich Post Office at that time, received and signed for this shipment on October 1, 1987 (I.D. FOF 1 & 9). Petitioner did not post or in any other way record the stamp stock valued at $4,200 (I.D. FOF 9). In early 1988, the Postal Service Data Center generated a "statement of difference" showing that the postage stock shipped on September 30, 1987, had not been posted and that stamp stock valued at $4,200 was missing (I.D. FOF 2). During the same period, an audit at the Norwich Post Office disclosed that unexplained overages existed in the main stock inventory in the sum of $76.50 and in the accounts of window clerks in the total amount of $1,354.91 (I.D. FOF 16). The Postal Service did not take any action to ascertain the cause of these overages or to determine if any relationship existed between the overages and the main stock shortage (I.D. at 12).

In reviewing the evidence, the Administrative Judge found that Petitioner, as main stamp stock custodian, was responsible for the main stock inventory and therefore, under applicable postal regulations, was strictly accountable for any loss to the Postal Service, unless the evidence established that he exercised reasonable care in the performance of his duties (I.D. at 9). The Administrative Judge concluded that Petitioner's failure to post the stamp stock valued at $4,200 was evidence that he did not exercise reasonable care in the performance of his duties. However, this failure did not, by itself, establish that the Postal Service had suffered an actual loss in the amount of $4,200 (I.D. at 9 & 10). Rather, the Administrative Judge determined that the actual loss to the Postal Service was the difference between the value of the missing stamp stock and the total overages discovered in the January 1988 audit (I.D. at 12). Accordingly, Petitioner was found to be indebted to the Postal Service in the amount of $2,768.59.

Respondent has filed two exceptions to the Initial Decision which have been considered and are addressed hereafter.

Exception One

Respondent takes exception to the Administrative Judge's conclusion that the stamp stock shortage at the Norwich Post Office should be offset by the amount of overages discovered during the January 1988 audit. Respondent contends that the Post Office Accounting Procedures, Handbook F-1, requires Petitioner to prove that a "relationship" exists between the main stock shortage and the overages before such an offset may be made. According to Respondent, the Administrative Judge incorrectly placed the burden to disprove the existence of any such relationship on the Postal Service.

Although Respondent correctly states that Handbook F-1 requires that a relationship exist between shortages and overages before an offset may be made, the provisions of the Handbook do not require Petitioner to prove the existence of this relationship. Rather, under § 472.223 of Handbook F-1, the postmaster or a designated supervisor is responsible for deciding whether a relationship between shortages and overages exists and whether an offset should be made. n1 Since the Postal Service, the claimant in this proceeding, did not take any action to determine the relationship between the shortage and overages, it is not entitled to recover the total shortage without crediting Petitioner with the existing overages. Thus, as determined by the presiding Administrative Judge, Respondent may only recover the difference between the $4,200 shortage and the overages of $1,431.41. Accordingly, the Administrative Judge did not err in offsetting Petitioner's indebtedness with the overages.

n1 1. Even in the absence of the Handbook provision, Respondent, as the party seeking recovery of damages, bears the burden of proving not only that a loss has occurred but the actual amount of that loss. See e.g. Hendrix v. Raybestos-Manhattan, Inc., 776 F.2d 1492, 1507 (11th Cir. 1985); Pemberton v. OvaTech, Inc., 669 F.2d 533, 541 (8th Cir. 1982); George E. Hoffman & Sons, Inc. v. Local 627, International Brotherhood of Teamsters, 627 F.2d 1234, 1247 (7th Cir. 1980), cert. denied 449 U.S. 937 (1980). Moreover, Petitioner should not be required to bear the burden of proving facts solely within the knowledge of Respondent. See United States v. New York, New Haven & Hartford R.R. Co., 355 U.S. 253, 256 n. 5 (1957); Selma Rome & Dalton R.R. Co. v. United States, 139 U.S. 560, 567 (1891); Nader v. Allegheny Airlines, Inc., 512 F.2d 527, 538 (D.C. Cir 1975), reversed on other grounds, 426 U.S. 290 (1976).

Exception Two

Respondent takes exception to the Administrative Judge's failure to apply the doctrine of collateral estoppel to an arbitration award n2 which found Petitioner responsible for the loss of stamp stock valued at $4,200. Respondent argues that under this doctrine, the Administrative Judge is required to accept the Arbitrator's determination and grant the Postal Service damages in the amount of $4,200.

n2 2. After receiving a Notice of Removal of Employment, Petitioner initiated a grievance proceeding which resulted in an arbitration award upholding Petitioner's removal from employment.

Respondent's reliance on the doctrine of collateral estoppel is misplaced. In order for the doctrine to apply, the issue previously adjudicated must be 1) identical to the issue in the present proceeding; 2) actually litigated in the prior case and 3) necessary as a part of the judgment in the earlier action. See Thomas v. General Services Admin., 794 F.2d 661, 664 (Fed. Cir. 1986); Holmes v. Jones, 738 F.2d 711, 713 (5th Cir. 1984); Wing v. J.C. Bradford & Co., 678 F. Supp. 622, 627 (N.D. Miss. 1987). Further, the doctrine does not apply to the issue of damages where an earlier arbitration decision is ambiguous in its award of damages or in its method of calculating the amount of those damages. See e.g. Wing, 678 F. Supp. at 627-29; Ufheil Const. Co. v. Town of New Windsor, 478 F. Supp. 766, 768-69 (S.D.N.Y. 1979).

In rendering his decision, the Arbitrator did not address the issue of damages sustained by the Postal Service nor the issue of overages and their application, if any, to Petitioner's indebtedness. Nothing in the arbitration record suggests that the arbitrator was asked to address these issues or that consideration of these issues was necessary in determining the outcome of the decision upholding Petitioner's removal from employment. Since the issue of damages and the relationship of the overages to the shortage were neither addressed in the arbitration proceeding nor necessary to the Arbitrator's decision, the Administrative Judge was not precluded from addressing those issues in the Initial Decision. Therefore, Respondent's exception is denied.

Conclusion

Based on a review of the entire record and Respondent's exceptions, it is concluded that the Administrative Judge correctly determined that Petitioner is indebted to the Postal Service in the amount of $2,768.59. Accordingly, Respondent's appeal is denied and the Initial Decision is affirmed.