NANCY LEMONDE

P.S. Docket No. DCA 08-169

APPEARANCE FOR PETITIONER
Charles Scialla

APPEARANCE FOR RESPONDENT
Lynn M. Chiocchi

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Nancy Lemonde, filed a Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets, dated May 9, 2008, from her postmaster.  This Notice stated the Postal Service’s intent to withhold $3,474.40 from Petitioner’s salary to recover a shortage in a unit reserve account for which Petitioner was accountable.

            Following a telephone conference with the parties on June 18, 2008, Petitioner filed a Motion to Dismiss the Postal Service’s claim on the ground that the alleged debt arose in 1991 and is barred by a ten-year statute of limitations.  Respondent, the United States Postal Service, opposed the motion, arguing that the alleged debt is based on an audit of Petitioner’s unit reserve account on March 16, 2007.

             On July 29, 2008, Petitioner’s motion was denied because the record at that time did not demonstrate that the alleged debt arose in 1991.  The decision on the motion also noted that at a hearing, or in further written proceedings, both sides should present additional evidence as to when, and how, the apparent loss occurred, and whether it occurred during the time that Petitioner was the accountable custodian.

            During a telephone conference with the parties on August 6, 2008, the parties agreed that this case would be decided on written submissions and a schedule was set for the parties to file additional evidence and argument.  Both have done so, although neither submitted any statements from witnesses, including Petitioner, who might have knowledge about what happened here.  The following findings of fact are based on all the material submitted by the parties.

FINDINGS OF FACT

            1.  Petitioner is a supervisor at the Venice, Florida post office.  On November 1, 2002, she became the custodian of the unit reserve stamp stock and signed a PS Form 3369-P, accepting the account in the amount of $225,000.00.  (Answer, Ex. 1).

            2.  On March 16, 2007, the unit reserve account was transferred from Petitioner to another employee.  On that date, Petitioner and her successor conducted an audit of the account and found it to be short $3,474.40.  Two specific items made up that shortage.  The first is listed as item number 910324, described as “SIA Ofc Rur Rte 24 Fxd Credit.”[1]  The record showed the accountable quantity as 257800, valued at 1¢ each ($2,578), but the audit failed to identify any accountable quantity actually present.  The second is listed as item number 910326, described as “SIA Ofc Rur Rte 26 Fxd Credit.”[2]  The record showed the accountable quantity as 89640, valued at 1¢ each ($896.40), but the audit failed to identify any accountable quantity actually present.  (Answer, Ex. 2; Respondent’s July 14, 2008 submission, Ex. 4).

            3.  Immediately following the audit, Petitioner posted the audit result in the computerized stamp stock management system, showing a shortage of $3,474.40, with the comment, “Stamps on Consignment short.”  (Answer, Ex. 3).

            4.  On August 31, 2007, Petitioner submitted a Claim for Loss to her postmaster.[3]  She stated that the two shortages, $2,578.00 and $896.40, were based on stamps consigned to two retail stores in 1990 and 1991, under contracts that were later terminated without the Postal Service ever collecting money from the retailers for those stamps.[4]  She further stated that she was not aware of the facts regarding these two items when she signed for the unit reserve in 2002.  (Respondent’s July 14, 2008 submission, Ex. 4).

            5.  On September 12, 2007, Petitioner’s postmaster forwarded the Claim for Loss to the Finance Manager, recommending approval and reiterating Petitioner’s statement that these items dated back to 1991 and had “been carried for several years” before Petitioner became the unit reserve custodian.  (Letter attached to Petition).

            6.  On November 2, 2007, the Finance Manager denied the postmaster’s request, stating that the “documentation does not clearly establish the employee was not accountable for the loss.”  On November 13, 2007, another official replied directly to Petitioner, also denying the Claim for Loss for the same reason as stated by the Finance Manager.  (Letter attached to Petition; Respondent’s July 14, 2008 submission, Ex. 5).

            7.  On June 20, 1990, a Postal Service contracting officer in Tampa, Florida entered into a consignment agreement with a company called Carey & Lyon, d/b/a PAK MAIL in Venice, Florida.  The agreement, by which the Postal Service agreed to furnish $2,578.00 worth of stamps to PAK MAIL, was signed by Mr. Carey for the consignee.  On July 10, 1990, Mrs. Carey signed a PS Form 3369, acknowledging receipt of $2,578.00 worth of stamps.  (Petitioner’s August 27, 2008 submission, Exs. 1 and 2).

            8.  On February 26, 1991, a Postal Service contracting officer in Tampa, Florida entered into a consignment agreement with a company called Claire’s Hallmark in Venice, Florida.  The agreement, by which the Postal Service agreed to furnish $896.40 worth of stamps to Claire’s Hallmark, was signed by Mr. Wylie for the consignee.  On May 2, 1991, Mr. Wiley signed a PS Form 3369, acknowledging receipt of $896.40 worth of stamps.  (Petitioner’s August 27, 2008 submission, Exs. 1 and 2).

            9.  On April 1, 2000, Mr. and Mrs. Adams, who were then doing business as PAK MAIL in Venice, wrote to the then postmaster of Venice.  The letter was in response to an apparent inquiry from the postmaster about the 1990 consignment contract (see Finding #7).[5]  The substance of the letter was that the Adamses purchased the business in 1997 and have never had a consignment contract with the Postal Service.  (Petitioner’s August 27, 2008 submission, Ex. 2).

            10.  From the time of the two consignment agreements (Findings #7 and 8), until the time Petitioner took over the unit reserve account, there were six different postmasters or officers-in-charge in Venice.  The record does not show how many different people served as custodian of the unit reserve during that time, nor does the record include copies of any audits of the unit reserve account other than the March 16, 2007 audit.

DECISION

            Petitioner argues that the $3,474.40 shortage is the result of Claire’s Hallmark and PAK MAIL never paying the Postal Service for the stamps consigned to them in 1990 and 1991, and that this shortage was “carried” through several transfers of the unit reserve account until Petitioner’s successor declined to sign for it in March 2007.

            Respondent’s position is that we do not know for certain that this shortage dates back to 1991.  Respondent’s theory is that Petitioner accepted the accountability in 2002, therefore she is liable for any shortage that was identified thereafter.  Respondent also disputes Petitioner’s claim that the shortage had been carried through several transfers, citing an August 22, 2008 statement from the postmaster that the shortage was never carried in suspense until after the March 2007 audit.[6]

            Because we have no documents relating to previous transfers of the unit reserve account, and no statements from any of the people involved in those transfers or in the March 2007 audit, we are left to speculate.  Nevertheless, the record provides support to Petitioner’s argument.  First, the items recorded as missing on the March 2007 audit match exactly the amounts in the 1990 and 1991 consignments to PAK MAIL and Claire’s Hallmark.  It strains credibility to believe that this is just a coincidence and these numbers are not related.  Further, the April 2000 correspondence (see Finding #9) demonstrates that the postmaster at that time, more than two years before Petitioner became the custodian, was attempting to clear up some sort of discrepancy with a consignment agreement, most likely a belief that PAK MAIL owed the post office some money.

Part of Respondent’s burden of proof is to show that the loss from the unit reserve occurred during the time that Petitioner had the accountability.  If Petitioner was aware that her accountability included stamps that she knew were not there and did nothing to record that fact or report it until March 2007, perhaps she is guilty of some misfeasance in her job performance, but this is not enough to make her financially liable for a loss that occurred many years before she took over the unit reserve account.

            Additionally, even if the consignment accounts were found to have suffered losses while Petitioner was the unit reserve custodian, Respondent has not articulated a basis for holding her liable.  Absent a showing of collusion or some specific dereliction by a custodian that caused the loss, Respondent has not shown a basis for holding a custodian liable for losses resulting from a consignee’s failure to return or pay for stamp stock.

            Because the evidence supports a conclusion that the loss alleged here relates to consignment contracts, and Respondent has failed to establish a basis for liability or prove that the loss occurred during the time that Petitioner was accountable for the unit reserve at the Venice Post Office, the Petition is granted.  Respondent may not collect $3,474.40 from Petitioner’s salary.

Bruce R. Houston
Chief Administrative Law Judge

[1] The record contains no explanation of what this description means.

[2] The record contains no explanation of what this description means.

[3] A “claim for loss” asks that the Postal Service write off an apparent loss without holding any individual personally liable.

[4] The record does not make it clear exactly when these contracts were terminated, but Petitioner has always asserted that it was long before she became the unit reserve custodian and Respondent has not contradicted this.

[5] The postmaster’s letter to which the Adamses were responding is not part of the record.

[6] In supporting Petitioner’s Claim for Loss, however, this same postmaster endorsed Petitioner’s theory (see Finding #5).