Milligan v. OWCP, 1999-DCA-3 (ALJ Mar. 30, 2000)

U.S. Department of Labor

Office of Administrative Law Judges 2600 Mt. Ephraim Avenue Camden, NJ 08104 (856) 757-5312 856-757-5403 (FAX)

DATE: March 30, 2000

CASE NO: 1999-DCA-00003

In the Matter of:

MICHAEL F. MILLIGAN
Petitioner

v.

U.S. DEPARTMENT OF LABOR,
OFFICE OF WORKERS'
COMPENSATION PROGRAMS,
Respondent

   The debt which OWCP seeks to collect through salary offset procedures resulted from an overpayment of workers' compensation benefits to Milligan under that Federal Employees' Compensation Act (FECA), 5 U.S.C. §8101 et seq. The record shows that in 1997 Milligan was receiving FECA benefits for temporary partial disability based on his restriction to a four hour per day work schedule. On February 12, 1997, Milligan increased his work hours from four to six daily, and he increased his work hours again on June 23, 1997 from six to seven and one half hours daily. However, his FECA benefits were not immediately adjusted to reflect these increases in Milligan's hours worked. When the OWCP belatedly discovered that it was still paying benefits to Milligan based on a four hour per day schedule, it determined that an overpayment had occurred.

   On March 27, 1998, the OWCP issued a preliminary determination that Milligan had received an overpayment in the amount of $6,800.50 and that he was at fault in the creation of the overpayment. On April 21, 1998, the OWCP finalized its preliminary determination that Milligan was at fault in the creation of the overpayment. Accompanying the final decision was a notice to Milligan that the debt was due and payable, that the overpayment was subject to accrual of interest, and that, where appropriate, the OWCP could collect the debt by deductions from his Postal Service salary. The OWCP also notified Milligan that he had the right to request review of the overpayment decision by the Employees' Compensation Appeals Board (ECAB). There is no evidence in the record that Milligan ever sought review by the ECAB.

   By letter dated July 7, 1998, the OWCP issued a second demand for payment, noting that it had not received any indication that Milligan intended to cooperate with repayment. The letter again informed Milligan that the OWCP was empowered to seek deductions from salary in the event Milligan did not send payment. The letter further stated to Milligan that he should reply within 30 days regarding his intention to discharge his indebtedness. On December 30, 1998, the OWCP issued a third demand for payment. In this demand, the OWCP noted that its records showed Milligan was currently employed by the United States Postal Service and that the DCA and Department of Labor regulations authorized it to recover the overpayment by salary offset in an amount not to exceed 15 percent of his disposable pay for any period. The letter further notified Milligan of the OWCP's intention to recover the debt through a biweekly salary offset in the amount of $186.00 and of his right to request a hearing before an Administrative Law Judge. By letter dated January 12, 1998, Milligan filed a timely request for a hearing. In this request, he stated that he was not denying that there was an overpayment, but that he had not been given a chance to go over his file and felt that the amount claimed by the OWCP was wrong. He also stated that the proposed repayment schedule would hurt his family.

   An oral hearing in the matter was originally scheduled before Administrative Law Judge Lawrence P. Donnelly for May 18, 1999. On May 17, 1999, Counsel to DOL filed a notice of appearance and requested for an extension of time to file a responsive pleading as it intended to appear at the hearing solely through the submission of written pleadings. Judge Donnelly granted this request, and DOL filed a memorandum of law and supporting evidence on July 15, 1999. In its memorandum, DOL reiterated that it would appear solely by written submission based on limited resources and the lack of any substantial issue regarding witness credibility. Judge Donnelly subsequently retired, and the matter was reassigned to me.

   On November 10, 1999, I issued a notice of hearing for November 30, 1999 which I canceled by order issued on November 22, 1999 after my review of the record revealed that an oral hearing was not appropriate. In this regard, I noted that the Regulations provide that the hearing ordinarily shall be based on written submissions and documentation submitted by the debtor, except that an oral hearing shall be provided when the administrative

law judge determines that: (1) an applicable statute authorizes or requires the agency to consider a waiver of the indebtedness, the debtor requests a waiver and the waiver determination turns on a question of credibility or veracity; (2) the debtor requests reconsideration of the debt and the question of indebtedness can not be resolved by a review of the documentary evidence; or (3) an oral hearing is otherwise appropriate. 29 C.F.R. §20.81(c). I further noted that Milligan stated in his request for hearing that he does not deny the overpayment but contends that the amount is wrong and that the repayment amount requested by OWCP will hurt his family. Since DOL had advised that it did not intend to appear at an oral hearing, in part because of the lack of any issue regarding the credibility of witnesses, I determined that there is no material question of credibility or veracity requiring a hearing and that an oral hearing is not otherwise warranted as it appears that a decision on all issues may be made on the basis of written submissions. Accordingly, I canceled the oral hearing, and I allowed Milligan until December 27, 1999 to submit the following: (1) a statement, accompanied by documentary evidence and statements from knowledgeable witnesses (if any), which fully identifies and explains with reasonable specificity the facts which support his position that the Respondent Agency's information relating to the debt is not accurate, timely, relevant or complete; and (2) a statement, accompanied by documentary evidence showing his monthly expenses and income from all sources, in support of his contention that the Respondent Agency's proposed repayment schedule is not feasible, allowable and appropriate because it would result in financial hardship to his family.

   Pursuant to my order, Milligan submitted a letter dated December 20, 1999 in which he states that it has come to his attention that he is not responsible for the overpayment of FECA benefits. In support of this contention, Milligan submitted copies of what he represents are e-mail messages between Cathleen M. Taylor of the Postal Service Compensation Department and Anne H. Vogtli also of the Postal Service. These messages, which cover the periods of February 13-14, 1997, May 5 to June 3, 1997 and November 5-6, 1998, indicate that Milligan requested to increase his work hours and that Ms. Taylor and Ms. Vogtli were aware that an increase in his hours would result in a corresponding decrease in his FECA benefits. This is illustrated by the following message dated May 9, 1997 from Ms. Taylor to Ms. Vogtli:

Sorry, I forgot to answer you. If we changed hin to 8 hours, it would have to be full time, and with his doctor's concurrence.

He has it made right now. Comp still hasn't reduced his compensation payments. So, he is working 6 per day, and still getting paid from them as if he were working 4. THEY ARE SO SLOW!

If he went to a 40 hour week, his comp would end altogether.

Milligan contends that these messages show that he always informed Postal Service compensation officials when his hours were changed. Milligan further states, by way of

background, that he was on disability retirement, not workers' compensation, in June 1996 when he was offered and accepted a job at the Postal Service. According to Milligan, this job offer did not state that he would receive compensation for the difference in pay from the time he was injured. Milligan additionally argues that he suffers from work-related carpal tunnel syndrome, that OWCP has not approved surgery for this condition, that OWCP had not proved the amount of the overpayment to him by means of producing canceled checks, and that it is his position that DOL owes him money because he has been reduced to part-time flexible employee due to his on- the-job injury resulting in a reduction of earnings and benefits totaling $3,154.00 per year.¹ Finally, Milligan stated in his letter that he had previously submitted evidence concerning the financial burden of the repayment schedule, and he requested that this be considered in arriving at a decision in this matter.

   Milligan's evidence of financial hardship is contained in an Overpayment Recovery Questionnaire which he completed and submitted to the OWCP in January 1998. In this questionnaire, Milligan claimed six dependents, his wife and five children. He reported a total monthly income of $2,795.00 based on take-home wages of $2,700.00 and a pension benefit of $95.00. Against this total monthly income, Milligan reported monthly expenses of $2,300.00 consisting of the following items for his family of six dependents: rent or mortgage including property tax ($500.00); food ($600.00); clothing ($300.00); utilities ($350.00); miscellaneous expenses ($250.00); and monthly credit payments ($300.00). Thus, Milligan's total monthly income exceeds his reported monthly expenses by $495.00.

   As discussed above, the DCA provides debtors with a right to a hearing prior to execution of salary offset concerning the existence or amount of the debt or the repayment schedule proposed by the agency. However, neither the DCA nor its implementing regulations vest an administrative law judge with the jurisdiction to substantively review the underlying debt. Such review is governed solely by the provisions of FECA which states that "[t]he action of the Secretary or his designee in allowing or denying a payment under the sub-chapter is: (1) final and conclusive for all purposes and with respect to all questions of law and fact; and (2) not subject to review by another official of the United States or by mandamus or otherwise." 5 U.S.C. §8128(b). Therefore, the issues properly before me are: (1) whether the debtor's agency has actually established both a debt and its correct amount upon which an offset is based; and (2) whether the terms of the proposed repayment schedule are feasible, allowable and appropriate. See Brownlee v. Director, OWCP, 1997-DCA-2

¹ Milligan arrives at this annual loss figure by computing the value of his lost holiday pay (80 hours per year), the loss of one hour of work per week (52 hours per year), lost vacation time (14 hours per year) and lost sick time (six hours per year) at his wage rate of $20.75 per hour. He further claims a projected total injury- related loss of $47,30.00 based on an annual loss of $3,154.00 multiplied by the 5 years that he has remaining before retirement eligibility.