March 14, 2001 In the Matter of the Petition by PETER D. DUPREE P.O. Box 872 at Poplar, MT 59255-0872 P.S. Docket No. DCA 00-456 APPEARANCE FOR PETITIONER: Jaime Chacon P.O. Box 2014 Mission Viejo, CA 92690-2014 APPEARANCE FOR RESPONDENT: Pat D. Simmons Labor Relations Specialist United States Postal Service 841 S. 26th Street Billings, MT 59101-9401
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Peter D. Dupree, filed a timely Petition after receiving a Notice of Involuntary Administrative Salary Offsets from his supervisor on November 1, 2000. This Notice stated the Postal Service's intention to withhold $24,000.00, to recover for the loss of a Registered Mail™ shipment from Petitioner's post office in June 2000.
A hearing was held in Billings, Montana on February 6, 2001. The Postal Service presented testimony from the postal inspector who investigated the loss, an accounting manager, a postal systems coordinator, and the Post Office Operations Manager for the Eastern Montana District. Petitioner testified in his own behalf, and also presented testimony from two clerks in his office, Mr. Green and Ms. Reddies. The following findings of fact are based on the entire record, including observation of the witnesses and their demeanor.
FINDINGS OF FACT
1. Petitioner has been the postmaster at Poplar, Montana for approximately six years. Poplar is a small post office, with only three other employees. (Tr. 149, 155; Answer, Tab 5).1
2. On June 9, 2000, the Federal Reserve Bank in Helena, Montana dispatched a shipment of cash to Traders State Bank in Poplar, Montana by Registered Mail. The shipment consisted of twelve separate bags, with register numbers in sequence from R275 202 634 through R275 202 645. Each bag contained from $5,000 to $25,000, and the total shipment was $250,000. Such shipments occur every few weeks in this part of Montana. The cash in each bag is contained in a tamper-proof, sealed wrapper. (Tr. 96-97, 101; Answer, Tab 1).
3. The shipment was transported from the Helena Post Office to the Poplar Post Office by a highway contract carrier. Because there is a limit on the total value that can be carried at one time, one of the twelve bags (R275 202 644) was carried separately from the others. The eleven-bag shipment arrived at the Poplar Post Office on Saturday morning, June 10, 2000, and was received by part-time clerk, Troy Green. Mr. Green listed the eleven register numbers (#634 through #643, and #645) on a PS Form 3883 and locked the eleven bags, along with the Form 3883, in a metal cabinet that is regularly used for such purpose. The eleven register numbers listed by Mr. Green match the register numbers on the shipping list (PS Form 3854) that accompanied the shipment. Before closing the office at about noon, he placed the cabinet key on a counter in the front of the office so that the clerk arriving on Monday morning would know Registered Mail had been received on Saturday. This was standard practice in the Poplar office at that time. (Tr. 78-79, 110-11, 117-18, 131-35; 145; Answer, Tab 1, Exs. 5, 7, 12 and 19).
4. On Monday morning, June 12, 2000, clerk Wendy Reddies was first to arrive at the Poplar office, at about 7:30. Mail, including a registered pouch, had already been delivered. Ms. Reddies opened the registered pouch, which contained the twelfth bag of cash, register #R275 202 644. She took the key from the counter, opened the locked cabinet and removed the eleven bags and the Form 3883 that Mr. Green had placed there on Saturday. Because she knew that someone from Traders State Bank would arrive soon to pick up the shipment, she left all the bags on a counter near the rear of the post office. This also was standard practice in the Poplar office at that time. She did not count the number of bags or match the register numbers to the numbers listed by Mr. Green on the Form 3883. At some time, Ms. Reddies added #R275 202 644 to the eleven register numbers on the Form 3883, scratched out the word "eleven" that Mr. Green had written at the bottom of the form, indicating the number of pieces received, and wrote in "twelve."2 (Tr. 83-84, 110-11, 117-18, 139-43, 155; Answer, Tab 1, Exs. 12 and 13).
5. Two bank employees, Ms. Solum and Ms. Mitchell, arrived at the post office between 8:30 and 9:00 a.m. on June 12 to pick up the cash shipment, as well as other mail for the bank. They each told the investigating postal inspector that they each counted eleven bags, although neither matched the register numbers on the bags to the numbers listed on the Form 3883. No postal employee participated in verifying what the bank employees received. Ms. Mitchell signed the Form 3883, indicating that she had received the items listed on the form. The Form 3883 remained at the post office, and there is no system or requirement that the customer be given a copy of that form. (Tr. 21-22, 85-87, 95; Answer, Tab 1, Exs. 12, 14 and 15).
6. Petitioner was in the post office on the morning of June 12 and noticed the bags of currency on the table at the rear of the office. He did not handle any of the registered items or related paperwork and did not participate in the transfer of the registered items to the bank employees. (Tr. 84, 141; Answer, Tab 1, Ex. 18).
7. Sometime later on June 12, 2000, someone at Traders State Bank discovered that the total cash received was short $24,000 from what had been ordered, and that they did not have the bag that was register #R275 202 639. They did have #644, the twelfth bag, which the post office had received on Monday morning, June 12. After making inquiries of the post office on June 13 and June 14, to ask whether another cash shipment had arrived, the bank notified the Federal Reserve Bank in Helena, which in turn notified the Helena Post Office, that register #639 containing $24,000 was missing. A postal inspector, Mark Morse, was sent to Poplar to investigate. (Tr. 79-80, 87; Answer, Tab 1, Ex. 14).
8. On August 24, 2000, the Post Office Operations Manager for the Eastern Montana District, Ms. Downey, issued Petitioner a letter of demand for $24,000, alleging that he had failed to follow and enforce Postal Service procedures for handling Registered Mail. The Notice of Involuntary Administrative Salary Offsets was issued to Petitioner on October 26, 2000. At some time, date unknown, Traders State Bank filed a claim against the Postal Service for the loss of $24,000. There is nothing in the record to show the status of the bank's claim. Ms. Downey testified that the decision on whether to pay or deny a claim is made by someone in a finance office, and that she did not know whether the claim had been paid.3 She assumes the claim will have to be paid because the Poplar Post Office did not follow proper procedures in handling the registered packages. (Tr. 120-23; Answer, Tab 2).
9. Registered Mail is the most secure transportation and delivery service offered by the Postal Service. The rules and procedures for handling valuable Registered Mail, such as shipments of cash, are found in the Domestic Mail Manual (DMM) Section S911, and in PS Handbook DM-901, Registered Mail. These rules require that every transfer of custody be documented by chain-of-custody receipts so that individual accountability can be determined at all times, and that Registered Mail items be kept locked in a secure container until custody is transferred. (Answer, Tab 7 and Tab 8).
10. PS Handbook DM-901, Section 723, states: "Postmasters and postal employees are personally responsible for the wrong delivery, depredation, or loss of any Registered Mail because of negligence or disregard of instructions." (Answer, Tab 7).
DECISION
Respondent's position is that, as postmaster, Petitioner was responsible for seeing to it that established Postal Service procedures for handling Registered Mail were followed. Respondent argues that Petitioner clearly was aware that his office's practices of leaving the key to a cabinet full of cash available to anyone who might pick it up, leaving a large amount of cash unattended on a table for as much as an hour, not requiring everyone who handled cash shipments to sign chain-of-custody receipts, and not having a postal employee verify the transfer of registered items to a customer, were not in accordance with Postal Service regulations. The fact that these practices may have been followed for many years, or that Petitioner may not have initiated them himself, is no excuse, Respondent contends.
Petitioner argues that, even though Postal Service employees at the Poplar Post Office did not follow all procedures for safeguarding Registered Mail, the evidence has not established that the missing cash was lost at the post office, rather than at the bank. He points to the receipt (Form 3883) signed by the bank employee on June 12. Whether there were twelve register numbers listed, or only eleven, there is no question that #639 was listed on the receipt form, and that is the one that the bank claims is missing. Once the bank signed the form, acknowledging receipt of that item, Petitioner argues that the Postal Service is clear of liability for a claim that the item was not delivered.
Petitioner also cites the testimony of Ms. Downey on cross-examination, wherein she acknowledged that she had heard from several people that Traders State Bank had a possible suspect among their own employees.4 (Tr. 127).
To establish Petitioner's liability under the standard quoted above (see Finding of Fact #10), Respondent must prove that Petitioner's "negligence or disregard of instructions" caused the loss of the registered package. Brad A. Noble, P.S. Docket No. DCA 95-206 (November 8, 1995). There can be no doubt that the procedures followed at the Poplar Post Office were inadequate, but if the missing register was lost after the bank took possession of it, Petitioner's failures were not the proximate cause of the loss.
Respondent argues that Petitioner should be held liable and that if the missing money is recovered, or it is later determined that the Postal Service is not required to pay the bank's claim, Petitioner can then be reimbursed. That, however, leaves Petitioner at the mercy of a decision-making process in which he is not represented and to which he may have no direct input. I must decide this case on the record before me. That record shows that one of the two bank employees signed a receipt indicating that they took possession of the missing register. Respondent's evidence does not prove that this is incorrect and that the register was lost while the Poplar Post Office had custody of it.
Because Respondent has not proved that Petitioner's failures to insure that his subordinates followed the proper procedures for handling Registered Mail caused the loss of this particular piece of mail, the Petition is sustained. Respondent may not withhold $24,000 from Petitioner's salary.
Bruce R. Houston Chief Administrative Law Judge
2 Ms. Reddies insists that she did this before the bank employees arrived. The bank employee who took custody of the bags told the investigating postal inspector that only eleven items were listed on the form when she took delivery and signed the form. The postal inspector has been unable to conclusively resolve these apparently irreconcilable versions of the events of June 12. The inspector's Investigative Memorandum notes that the two bank employees, Ms. Solum and Ms. Mitchell "passed" a polygraph examination, and that Ms. Reddies' polygraph examination showed "deception indicated." The inspector testified on direct examination that Ms. Reddies' awareness that she had not followed proper procedures may have caused the "deception indicated." As it is not known how these tests were administered, or what questions were asked, I have not considered these results. In addition, Ms. Reddies, a seventeen-year employee at the Poplar Post Office, testified credibly at the hearing, and no bank employees testified. Further, even if one assumes that Ms. Reddies' version of the order of events is not accurate, there is no evidence that she took the money. (Tr. 91-93, 98-99, 144; Answer, Tab 1).
3 The Domestic Mail Manual (DMM) §S010.4.1 provides that the St. Louis Accounting Service Center adjudicates such claims.
4 This is the entirety of the evidence on this matter. There was no evidence presented as to who this suspect is or whether there is any ongoing investigation. Petitioner uses this only to argue that it is not clear that the Postal Service is liable to the bank for the loss.