August 17, 2012

In the Matter of the Petition by

ZEREX VEAL

P.S. Docket No. DCA 12-4

APPEARANCE FOR PETITIONER

Zerex Veal

APPEARANCE FOR RESPONDENT

Christie Kapanowski

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982 

Petitioner, Zerex Veal, filed a Petition for Hearing on January 4, 2012.  Respondent, United States Postal Service, sought to collect from Petitioner a debt in the amount of $10,010.45 for a shortage in the unit reserve at the Otto Mall Finance Station.  The Otto Mall Finance Station is under the Chicago Heights (Illinois) Post Office, where Petitioner served as postmaster.  During preparation for the hearing in this matter, both parties acknowledged that Petitioner was not the unit reserve custodian at the Otto Mall Station on the date of the audit that revealed the above cited shortage.  The unit reserve custodian at the time of the audit was Jacquelyne Johnson.[1] 

Based on this information, I expressed my concern that Respondent lacked a sufficient legal basis to hold Petitioner liable for this debt.  Respondent was directed to file with this office by May 3, 2012, an explanation of how it intended to hold Petitioner liable for the shortage in the unit reserve, with citation to appropriate authority.  Petitioner was invited to submit his reply by May 10, 2012.  See Order dated April 20, 2012.  Both parties submitted their materials in a timely manner.

Upon receipt of the pleadings, and after review, I issued an Order to Show Cause, in which I directed Respondent to file, not later than June 29, 2012, “a statement as to what documentary or testimonial evidence it intends to produce at the hearing that will satisfy the burden to establish that Petitioner directly caused the shortage alleged.”  Respondent failed to file any additional materials to address the issues raised in my Order to Show Cause.

We have addressed the issue of personal liability of postmasters in a number of cases.  In order to hold a postmaster personally liable for a shortage in the unit reserve when the postmaster is not the unit reserve custodian, the Postal Service bears the burden to establish that the actions of the postmaster directly caused the shortage.  Joseph Messet, P.S. Docket No. AO 09-115 (I.D. October 9, 2009)(“personal accountability of a postmaster who is not the custodian may be considered where the misdeeds of the postmaster directly caused the shortage.”); Angela Rhodes, P.S. Docket No. DCA 06-23 (May 10, 2006) (internal citation omitted) (in absence of regulation assigning personal accountability, analyzing whether “the shortage was the direct result of [Petitioner’s] actions.”); Albertha Johnson, P.S. Docket No. DCA 04-71 (August 23, 2004) (discussing possibility of accountability where “it were proved that some specific act of malfeasance or negligence by [Petitioner] directly caused the loss.”).

There is a difference between actions that lead to direct causation for a shortage, and actions (or inactions) that may be considered negligent, or even incompetent.  For example, we have found that when a postmaster directs a unit reserve custodian to falsify records to hide a shortage, that postmaster is not personally liable for the shortage, as his actions did not cause the shortage.  Joseph Messet, supra.  Likewise, a postmaster who forged signatures on P.S. Form 17’s and admitted to falisfying stamp counts could not be held liable for the unit reserve shortage in the absence of evidence proving such actions directly caused the shortage.  Peter G. Harris, P.S. Docket No. AO 09-41 (I.D. August 26, 2009).

Here, Petitioner was alleged to have neglected his duties as postmaster. As a result of that neglect, Respondent argued, he should be held liable for the shortage as the unit reserve custodian was relieved of liability in part based upon his actions as postmaster.  Even if Respondent could prove this allegation, it is not evidence that Petitioner directly caused the shortage.  Petitioner may have been an intervening cause in the failure to detect the unit reserve shortage earlier, but no specific action of Petitioner is alleged to have directly caused the shortage.  Indeed, a review of the record revealed that Respondent sought to hold Petitioner liable for this shortage simply because he failed to do his job in a proper fashion.  Even were that factual allegation proven accurate, it is not a sufficient basis alone by which Petitioner can be held accountable for the shortage in the unit reserve.  As we have often stated, the Debt Collection Act is only a vehicle for recovering employee debts, and not a means to punish poor job performance.  See, e.g., Gertrude S. Campbell, P.S. Docket No. DCA 99-70 (June 3, 1999). 

In a Debt Collection Act case, the burden rests with Respondent to prove that the debt is due and that Petitioner is liable for the debt.  To establish potential liability Respondent must allege facts sufficient to establish that Petitioner directly caused the shortage.  Respondent failed to allege the factual basis necessary to establish liability and did not argue that it would produce such evidence at the hearing.  In the absence of a proper allegation of a factual basis by which Petitioner can be held liable for the shortage, or of its intent to produce such evidence at the hearing, Respondent cannot meet its burden of proof.  In such a case it is unnecessary to proceed to a hearing.  None of the allegations set forth by Respondent meet the threshold burden to establish the liability of Petitioner.  Accordingly, Petitioner is entitled to summary judgment in his favor.

ORDER

The Petition is GRANTED.  Respondent may not collect the debt of $10,010.45 by administrative offset from Petitioner’s salary.

James G. Gilbert

Chief Administrative Law Judge

[1] Petitioner initiated collection against Ms. Johnson as unit reserve custodian following the discovery of the shortage.  Ms. Johnson grieved the collection of that debt.  In a grievance settlement executed on or about June 6, 2011, the parties agreed that Ms. Johnson would not be held personally liable for the shortage in the unit reserve as the Postal Service had failed to conduct proper audits of the unit reserve during the time period when she served as unit reserve custodian.  The terms of that settlement were not under review in this proceeding.