P.S. Docket No. DCA 17-286


May 22, 2018

In the Matter of the Debt Collection Act Petition

JOHN PRIDE v UNITED STATES POSTAL SERVICE

P.S. Docket No. DCA 17-286

APPEARANCE FOR PETITIONER:
John M. Vallie

APPEARANCE FOR RESPONDENT:
Le’ta H. Wicker
Labor Relations Specialist

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

John Pride challenges the Postal Service’s $19,413.80 debt assessment for the value of stamps which became missing while in his possession.  Following a February 28, 2018 video hearing, and subsequent submissions from the parties, I deny the Petition.

Findings of Fact

  1. At all times relevant to this case, the Postal Service employed Mr. Pride as supervisor of customer service at the Pleasant Grove Post Office in Dallas, Texas where he served as unit reserve custodian (Resp. Exh. 16; January 30, 2018 Order and Memorandum of Telephone Conference at 2 (stipulation); Tr. 5, 67).
  2. During April and May, 2017, the Pleasant Grove Post Office operated without a station manager (Tr. 68-70, 101).
  3. The Stamp Fulfilment Service Center (SFSC) sent an automatic shipment of stamps to the Pleasant Grove Post Office, which Mr. Pride received on April 27 or 28, 2017.  The box contained stamps worth $19,413.80, consisting of 1881 Forever Wonder Woman full pane stamps worth $9.80 each for a total of $18,433.80, and 2000 Forever Neon Celebrate stamps worth 49¢ each, for a total of $908.  (Resp. Exh. 21; Tr. 43, 63, 79-81).  After examining the contents of the box, Mr. Pride believed that his post office would not be able to sell the Wonder Woman stamps in that quantity, so he re-labeled the box, and sent it back to the SFSC either the same day he received it or the next day (Resp. Exhs. 9, 21; Tr. 20-21, 44, 49, 79-80, 108, 111).
  4. A few days later, Mr. Pride received the same box of stamps back from the SFSC with a PS Form 17, Stamp Requisition/Stamp Return, to transfer accountability to the Pleasant Grove Post Office’s unit reserve and with a note saying that because the stamps were newly issued and sellable, they were not eligible to be returned.  Mr. Pride lost the PS Form 17 and the note from the SFSC.  (Tr. 64-65, 81-83, 108).
  5. Although Mr. Pride received the shipment of stamps that were returned to him by the SFSC in his role of unit reserve custodian, he “overlooked” entering the stamps in the Postal Service’s electronic accounting system as having been received into his unit reserve accountability (Resp. Exh. 10; Tr. 42, 44, 48, 102, 139-40 (quotation at Tr. 140)).
  6. Mr. Pride did not move the stamps into the secured unit reserve area of the post office.  Instead, in the absence of a station manager from whom he could seek advice, he called a retail support supervisor in an effort to transfer the stamps elsewhere.  The supervisor suggested that Mr. Pride contact the Dallas Main Post Office, which has the largest unit reserve in the area, to see if he could transfer the stamps there.  Mr. Pride called the Main Post Office’s station manager, who also served as its unit reserve custodian.  The station manager said that she could accept transfer of the stamps.  (Tr. 24, 29, 83-84, 117, 120, 140).
  7. During the first week of May 2017, Mr. Pride drove to the Main Post Office with the stamps.  However, he had not filled out PS Form 17 (also referenced in this decision as the transfer receipt), which is required to document all stamp transfers, including transfers between unit reserves.  The Main Post Office’s station manager, who always requires a signed transfer receipt when accepting stamp transfers, did not accept the stamps and sent Mr. Pride back to fill out the form.  Mr. Pride returned to the Pleasant Grove Post Office with the stamps.  (Tr. 21, 85-86, 117, 120-23, 131-32).
  8. The stamps are missing (Resp. Exhs. 5-6; Tr. 19-24, 40-41, 136, 139).  Mr. Pride does not have a transfer receipt and does not know where it is (Tr. 45, 91-92, 101, 104, 106, 110, 134).  The Main Post Office’s station manager does not have a transfer receipt and does not believe that one exists.  The Main Post Office’s station manager keeps all transfer receipts in a finance binder at her office.  A PS Form 17 reflecting a transfer of stamps from Mr. Pride to the Main Post Office between April and the end of June, is not present with the forms maintained at the Main Post Office, and has never been discovered.  (Tr. 110, 122-23, 125-28, 130, 141; 134, March 23, 2018 Order and Memorandum of Telephone Conference at 1).
  9. Stamp transfers recorded on a PS Form 17 should be reflected in the Postal Service’s electronic accounting system.  The stamps at issue in this case were not identified anywhere in that system after the entry indicating the SFSC’s initial transmission of them to the Pleasant Grove Post Office.  (Resp. Exh. 10; Tr. 91-92, 102, 126-28, 130, 134-35, 140).
  10. If the missing stamps had been received at the Main Post Office without a PS Form 17 documenting the transfer, the Main Post Office’s unit reserve would have shown an overage of those stamps.  However, although the Main Post Office’s unit reserve was audited on April 27, 2017 and on May 27, 2017, neither audit revealed a large overage, nor any overage at all of Wonder Woman stamps.  All Wonder Woman and Neon Celebrate stamps that were supposed to be present in the Main Post Office’s unit reserve were counted in the May 27, 2017 audit.  (March 23, 2018 Order and Memorandum of Telephone Conference; Tr. 21, 127-28; Resp. Post-hearing submission at 4, 5, 8, 15, 40; Resp. Post-hearing submission # 2 at 1, 2, 8, 9, 11).
  11. Because Mr. Pride did not enter the stamps in the Postal Service’s electronic accounting system as having been received from the SFSC, nor did that system identify the whereabouts of the stamps at all, the accounting system automatically posted a loss.  Following a resulting investigation, the Pleasant Grove Post Office was expensed with that $19,413.80 loss for the value of the stamps that Mr. Pride received as custodian for his post office’s unit reserve.  (Resp. Exhs. 5-6, 23; Tr. 23-24, 48, 140).
  12. On November 20, 2017, the Postal Service issued Mr. Pride a Letter of Debt Determination assessing $19,413.80 (Resp. Exh. 2).  In response, on December 11, 2017, Mr. Pride filed a Debt Collection Act Petition.  The Postal Service did not issue a Notice of Involuntary Administrative Salary Offsets.  However, both parties waived further procedures, authorizing me to resolve this case.  (December 29, 2017 Order and Memorandum of Telephone Conference at 1; Tr. 4-5).

Decision

To recover, the Postal Service bears the burden to prove that the debt represents an actual loss in an account for which Mr. Pride was accountable.  See Glen Burks, DCA 10-3, 2010 WL 11570331 (May 21, 2010).  An actual loss ordinarily is proved by a stamp stock count that shows a shortage relative to a previously established balance in an account such as a unit reserve for which the employee is accountable.  See Patricia Todd, DCA 02-82, 2002 WL 35644070 (May 17, 2002).
Was Mr. Pride the accountable custodian?
Mr. Pride argues that, like many unit reserve custodians in the Dallas District, which failed to follow financial protocols, he did not sign a PS Form 3369, Consigned Credit Receipt.  He argues that he cannot be held accountable without the form.  However, prior to the hearing, Mr. Pride stipulated that he was the unit reserve custodian.  As a result, I issued an Order establishing that matter as a fact, and informing the parties that additional proof of that stipulated fact was unnecessary.  Order and Memorandum of Telephone Conference, January 30, 2018.  Furthermore, Mr. Pride acted as the accountable custodian throughout every step of the events involved in this dispute.  In such circumstances, Mr. Pride’s potential accountability as a unit reserve custodian has been established, and the absence of the form is not enough to excuse liability if otherwise proved.  See Blados v. United States Postal Service, DCA 14-328, 2015 WL 13647635 (June 9, 2015).
Were the missing stamps part of the Pleasant Grove Post Office’s unit reserve?
There is no dispute that Mr. Pride possessed the stamps as unit reserve custodian, nor is there a dispute as to their value (Findings 3-5).  Mr. Pride did not enter the stamps into the unit reserve account, either electronically or physically, even though he received them in his role as unit reserve custodian (Finding 5).  Those stamps are missing (Finding 8), and the Postal Service is not required to prove their whereabouts.  See Zane v. United States Postal Service, DCA 16-217, 2017 WL 5516570 (January 26, 2017).  In limited circumstances, evidence or admissions other than those relating to a stamp stock count may be used to prove an actual loss from a unit reserve account.  See Steward v. United States Postal Service, DCA 16-59, 2017 WL 5516581 (March 29, 2017).  Because the value of the admittedly missing stamps is abundantly clear, this is such a case, and a unit reserve count therefore is not necessary to prove the actual loss shown here.  See Allen Rapoport, DCA 96-425, 1997 WL 35414657 (February 7, 1997).
However, because Mr. Pride did not physically place the stamps in the unit reserve area or, as mentioned, enter them electronically as received in the accounting system, additional analysis is necessary.  In the absence of an independent legal source of personal liability, our precedent generally ties a unit reserve custodian’s liability for missing stamps shipped to a post office by the SFSC to those stamps having been received in the unit reserve.  See Steward, DCA 16-59 (unit reserve custodian liable for unexplained loss of box of stamps she received from the SFSC but which she left unattended).
Here, at all times Mr. Pride acted as the unit reserve custodian concerning his treatment of the missing box of stamps.  His return of the stamps to the SFSC was done to remove the stamps from his unit reserve accountability.  His effort to transfer the stamps to the Main Post Office was to the same effect.  Mr. Pride’s testimony, analyzed below, that he signed a PS Form 17 while trying to transfer the stamps from his unit reserve account to the Main Post Office’s unit reserve account demonstrates that the stamps were, in all meaningful respects, part of his unit reserve despite him having overlooked processing their receipt in the electronic accounting system.  I will not exonerate Mr. Pride from liability solely because he failed to process a PS Form 17 to input the stamps into the accounting system as belonging to his unit reserve before he attempted to transfer that accountability.  I believe that allowing a unit reserve custodian to inoculate himself from personal accountability solely by his unilateral inaction in this way would establish a precedent which does not represent the policy of the Postal Service.
The Postal Service therefore met its initial burden of proving an actual loss through the undisputed evidence and admissions regarding the missing stamps in Mr. Pride’s unit reserve accountability and in his personal possession.  See Steward, DCA 16-59.  Because the Postal Service met its initial burden, Mr. Pride is personally accountable for the loss unless he produces evidence sufficient to alleviate or offset the debt.  See D’Lucas v. United States Postal Service, DCA 15-129, 2015 WL 13647638 (September 28, 2015).  I next analyze Mr. Pride’s primary defense that he transferred the now-missing stamps to the Main Post Office.
Did Mr. Pride transfer accountability for the missing stamps?
Mr. Pride testified that he brought the stamps and a completed PS Form 17 to the Main Post Office.  He testified that the Main Post Office’s station manager took possession of most, but not all of the stamps, and that they both signed the transfer receipt, as did a witness.  Mr. Pride did not identify the witness and no such witness testified.  Mr. Pride, however, testified that he and the Main Post Office’s station manager both kept a copy of the signed PS Form 17 documenting the accountability transfer.  (Tr. 85-87, 93-94, 109-10, 131).  Neither Mr. Pride nor the Main Post Office’s station manager have a copy of the transfer receipt (Finding 8).  The Main Post Office’s station manager does not recall such a stamp transfer, and the stamps are missing (Finding 6; Tr. 131).
In deciding how to reconcile this record, I must keep in mind that the Postal Service need not prove what happened to the stamps.  As an affirmative defense, Mr. Pride bore the burden to show that accountability passed from him to the Main Post Office’s station manager, as its unit reserve custodian.  I cannot reach that conclusion based on the record before me.  To conclude that the transfer occurred as Mr. Pride testified, I would have to believe that both parties to the stamp transfer – Mr. Pride whose motivation to have retained the exonerating transfer receipt is extraordinary – and the Main Post Office’s station manager – lost the transfer receipt.  (See Findings
7-8).  I find such a coincidence unlikely.
Furthermore, if the stamps were transferred from the Pleasant Grove Post Office’s unit reserve to the Main Post Office’s unit reserve with a PS Form 17, but without its contents having been entered into the Postal Service’s electronic accounting system, the Main Post Office’s accounts would have shown an overage in the amount of the stamps at issue.  They did not.  (Findings 8-10).  Absent theft or destruction of the stamps, for which there is no allegation or evidence, if the stamps were transferred to the Main Post Office’s unit reserve account without paperwork and mistakenly were not added to the unit reserve physically or in the electronic accounting system, I would expect that box of stamps to have been discovered in the Main Post Office during the intervening year.  It was not.
The missing stamps and electronic accounting for them simply disappeared, without explanation, while Mr. Pride was accountable for them as unit reserve custodian, and while they were in his sole custody.  He therefore is liable for the $19,413.80 debt.
Did Mr. Pride prove any other defense to excuse or offset liability?
In addition to this primary defense, Mr. Pride also presents four additional defenses, which I briefly address.  First, he points out that an audit demonstrated that the entire Dallas District was found not to be in compliance with financial procedures.  However, he does not explain why this should affect his accountability, and I see no reason that it should.  Second, Mr. Pride argues that he was not negligent.  Even if that were true, the Postal Service is not required to prove any specific act of negligence to impose liability on an accountable unit reserve custodian, nor is it required to prove what happened to the missing stamps.  See Zane, DCA 16-27.  Third, Mr. Pride argues that he was not trained adequately to serve as unit reserve custodian.  Even if true, the lack of training does not excuse his accountability.  See Elliott v. United States Postal Service, DCA 15-86, 2016 WL 10572244 (January 8, 2016).  If Mr. Pride did not wish to undertake the responsibility of unit reserve custodian, he should not have served as custodian, and he did so at his own risk.  See Burks, DCA 10-3.  Fourth, Mr. Pride argues that a portion of the loss should be offset.  He testified that he returned from the Main Post Office with some (ill-defined amount of) Neon Celebrate stamps, and that he must have input those into the Pleasant Grove Post Office’s unit reserve because he believes that he sold them to a customer (Tr. 85, 110-12, 131).  However, Mr. Pride’s testimony was quite non-specific, he did not introduce documentary or other evidence showing a resulting overage in the retail stock, and did not present any corroboration for such an offset.  I conclude that Mr. Pride failed to satisfy his burden of proving this affirmative defense.
What is the appropriate salary offset schedule?
The Postal Service has not proposed a salary offset schedule, and I leave it to the parties to identify a mutually agreeable schedule.  If they are unable to agree, Mr. Pride may file another Petition and I will order a salary offset schedule which balances the Postal Service’s interest in collecting debts within a reasonable time against the financial hardship to Mr. Pride imposed by the repayment schedule.  See Kline v. United States Postal Service, AO 17-98, 2018 WL 1606048 (P.S.D. March 23, 2018).

Conclusion and Order

The Petition is denied.  The Postal Service is entitled to collect $19,413.80 by administrative salary offset from Mr. Pride.  The schedule for recovery is returned to the parties to negotiate subject to Mr. Pride’s right to file another Debt Collection Act Petition on that issue if they are unable to agree.

Gary E. Shapiro
Administrative Judge