P.S. Docket No. DCA 13-357


April 28, 2014

In the Matter of the Petition by

JOHN F. BRESLIN

P.S. Docket No. DCA 13-357

APPEARANCE FOR THE PETITIONER:
Gale R. Thames
National Labor Director, NAPFE

APPEARANCE FOR THE RESPONDENT:
Steven E. Sultan, Esq.
Inspector Attorney
United States Postal Inspection Service

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Respondent, United States Postal Service, seeks to collect a debt from Petitioner, John F. Breslin, for salary overpayments made between January 2009 and June 2013. Mr. Breslin argues that he should be excused from repaying the debt because (1) he notified the Postal Service of the overpayments when they started, and (2) the Postal Service waited too long before seeking repayment. Despite these arguments, the Postal Service has proved the existence and amount of the debt. Thus, it may collect the debt by administrative salary offsets.

FINDINGS OF FACT

Procedural Matters

  1. In September 2013, Mr. Breslin filed a Petition for a Debt Collection Act hearing that challenged a $21,807.36 debt claimed by the Postal Service. The Postal Service had notified Mr. Breslin of the debt in two invoices, one dated July 17, 2013, for $1,939.90 and one dated July 31, 2013, for $19,867.46. The Postal Service sent the invoices to Mr. Breslin by letters dated July 23 and August 6, 2013, respectively. Neither the letters nor the invoices advised Mr. Breslin of his right to file a petition under the Debt Collection Act. (Exhs. 7, 8).
  2. At the time the Petition was filed, the record did not include a Notice of Involuntary Administrative Salary Offsets, which normally precedes a Petition for Hearing with the Judicial Officer Department. During a telephone conference, Mr. Breslin waived his right to receive such a notice, and the parties agreed that it would be appropriate for me to adjudicate this case without additional procedural steps. (Order and Memorandum of Telephone Conference, October 18, 2013).
  3. Thereafter, the Postal Service produced a Notice of Involuntary Administrative Salary Offsets that had been issued on September 18, 2013. That notice, however, only asserted the right to collect $1,939.90, the amount associated with the July 17, 2013 invoice. (Exh. 22).
  4. Neither the invoices nor the Notice of Administrative Involuntary Salary Offsets included a repayment schedule. They merely asserted a general intention to withhold 15% of Mr. Breslin’s disposable pay. (Exhs. 7-8, 22).

    5. Mr. Breslin’s Employment and Salary History

  5. Before 2006, Mr. Breslin worked in the New York laboratory of the United States Postal Inspection Service. His pay grade was Inspection Service Law Enforcement (ISLE) 14, step 7. (Tr. 15-17, 33).
  6. As part of an Inspection Service reorganization in 2006, Mr. Breslin took an ISLE 13 position in Newark, New Jersey (Exh. 14; Tr. 15-17).
  7. Although Mr. Breslin took a position at a lower grade, he was entitled to receive his previous salary indefinitely (Tr. 35-36).
  8. Mr. Breslin’s previous salary as an ISLE 14, step 7 employee exceeded the pay for an ISLE 13, step 10 employee. Thus, Mr. Breslin was not entitled to any future salary increases unless the salary for an ISLE 13, step 10 employee increased above his retained salary. (Tr. 35-36).
  9. In January 2009, Mr. Breslin mistakenly received an annual salary increase (Tr. 37; Exh. 18).
  10. In January 2010, Mr. Breslin mistakenly received another annual salary increase (Tr. 37-38, Exh. 24).
  11. These overpayments continued into June 2013, when the Inspection Service discovered that Mr. Breslin was being overpaid (Tr. 19, 38-40).
  12. Mr. Breslin does not dispute that he received $21,807.36 in overpayments from January 2009 to June 2013 because of those mistaken salary increases (Tr. 10, 96; Exhs. 8-9).

    13. Mr. Breslin’s Efforts to Correct the Overpayment

  13. In January 2009, Mr. Breslin noticed the error in his salary (Tr. 60).
  14. In response to the error, he contacted the Deputy Lab Director, who instructed him to contact an Operations Specialist with the Inspection Service (Tr. 60-61).
  15. Mr. Breslin spoke to the Operations Specialist in January 2009 and told him about the overpayment. In response, the Operations Specialist told Mr. Breslin that he was entitled to the salary increase under the terms of the letter that Mr. Breslin had received from the Forensic Laboratory Services Director in September 2006 (Tr. 61-62, Exh. 14).
  16. Mr. Breslin continued to doubt his entitlement to the salary increase, but the Operations Specialist then cited the Postmaster General’s policy statement dated April 2, 2004, to support Mr. Breslin’s entitlement to a salary increase (Tr. 62; Exh. 13). The Operations Specialist said that Mr. Breslin was entitled to a salary increase because he had successfully completed two years in his new position (Tr. 62-63).
  17. Mr. Breslin then asked the Operations Specialist to confirm his entitlement to a raise with the both the Laboratory Director and Postal Service payroll officials (Tr. 63).
  18. The Operations Specialist agreed to look into the situation, but did not think there was an error. He said that he would contact Mr. Breslin if he changed his opinion. (Tr. 63).

DECISION

The Postal Service acknowledges that it mistakenly overpaid Mr. Breslin (Tr. 9). Likewise, Mr. Breslin agrees that he was overpaid, as well as the amount of the overpayment (Tr. 10). This dispute thus centers on two excuses to repayment raised by Mr. Breslin: (1) He brought the overpayment to the Postal Service’s attention in January 2009, but it insisted that he was entitled to the salary increase, and (2) the Postal Service forfeited its right to collect the debt because it waited too long (over four years) to correct the overpayments and seek repayment.

Neither argument is meritorious. First, employees who erroneously receive a salary overpayment from the Postal Service do not acquire any rights to that money, and it must be repaid—even in a situation such as this one where the Postal Service mistakenly told Mr. Breslin in 2009 that he was entitled to the money. Raymond J. Voisine, P.S. Docket No. DCA 95-22 (March 21, 1995)(citing DiSilvestro v. United States, 405 F.2d 150, 155 (2d Cir. 1968)). We have consistently followed this holding. E.g., Margaret L. Smith, P.S. Docket No. AO 11-151 (February 8, 2012) and Arnel L. Carter, P.S. Docket No. DCA 05-233 (March 6, 2006).

Second, the Postal Service did not forfeit its right to collect the debt simply because it waited over four years to correct its mistake and seek repayment. There is no statute of limitations on the Postal Service’s right to collect a salary overpayment. 31 U.S.C. § 3716(e); Merritt W. Foster III, P.S. Docket No. DCA 07-119 (May 27, 2009). Also, Mr. Breslin’s ability to present a defense to the debt has not been materially prejudiced by the Postal Service’s delays in recognizing or assessing the debt. Kathryn L. Schrack, P.S. Docket Nos. DCA 11-52, 11-53, 11-54 (August 26, 2011).
Accordingly, the Postal Service may collect the debt by salary offsets.

Repayment Schedule

While the Postal Service is entitled to collect the debt, I have authority to set the repayment schedule for the debt because of the procedural history of this case. As noted above, the Postal Service did not propose a repayment schedule for the debts it now seeks to collect. (Findings 1-4). In that situation, I am authorized to set a repayment schedule. 5 U.S.C. § 5514(a)(2)(D).

Based on the facts of this case, I find it reasonable that Mr. Breslin may have four-and-a-half years (116 pay periods) to repay the debt. Accordingly, the Postal Service may offset $188.00 per pay period for 115 pay periods, with a final offset of $187.36 in the last pay period.1

Alan R. Caramella

Administrative Judge

1 If at any time, this amount exceeds 15% of Mr. Breslin’s disposable pay, the Postal Service must reduce its offsets accordingly.