May 13,
2009
In the
Matter of the Petition by
CAROLINE
HARRINGTON
P.S. Docket No. DCA 08-333
APPEARANCE FOR PETITIONER:
Caroline
Harrington
APPEARANCE FOR RESPONDENT:
Linda J. Sanborn
Labor Relations Representative
FINAL DECISION UNDER THE DEBT
COLLECTION ACT OF 1982
Petitioner, Caroline Harrington,
filed a Petition for Hearing under the Debt Collection Act on November 4, 2008,
and supplemented her Petition on November 25, 2008. The Notice of Involuntary Administrative
Salary Offsets identified an alleged salary overpayment of $14,296.59, and
stated Respondent’s intent to collect the amount of $12,000 by administrative
offset from Petitioner’s salary.[1]
A hearing was held in
FINDINGS OF FACT
1.
Petitioner has
been employed by the Postal Service for 14 years. For the past 8 years she has been in a
full-time position and she has been assigned to the
2.
A Rural Carrier’s
compensation is determined by an evaluation of the carrier’s route in
accordance with procedures set forth in §531.3 of Postal Service Handbook
PO-603, Rural Carriers Duties and
Responsibilities (Tr. 35-37).
3.
Compensation for
the carrier is derived from the route classification in accordance with the above
evaluation and §563.12 of Postal Service Handbook
F-21,
Time and Attendance.
4.
At all relevant
times, Petitioner carried a route with a “K Evaluated Hour Route” classification
(Handbook F-21, §551.4; Tr. 34-35; Supplemental Answer, pp. 2, 3).
5.
Between February
24, 2006, and March 9, 2006, the Postal Service conducted a Rural Route
Evaluation of Petitioner’s delivery route (Supplemental Answer, p. 4). After the evaluation, Petitioner signed a
Form 4241 Rural Delivery Statistics Report (“RDS Report”) (Supplemental Answer,
p. 4).[4] The results of that evaluation were reported
on PS Form 4241-A with a processing date of April 7, 2006 (Supplemental Answer,
p. 2).
6.
In the box
marked “Loading” on PS Form 4241-A, a figure of “370” was entered (Supplemental
Answer, p. 2). That figure overstated
the loading time for Petitioner’s route, and should have been “53” (Tr. 18,
38-39, 49).
7.
Because of this
overstatement, the route was classified “K45V” instead of “K40V” and Petitioner
was paid accordingly (Supplemental
Answer, p. 2).
8.
Petitioner’s
route was again evaluated in January 2008, and a Form 4241-A was completed with
a processing date of January 29, 2008, and a retroactive effective date of
April 15, 2006 (Supplemental Answer, p. 3).
That form substituted the figure “53” for the figure “370” for Loading
Time which led to a reduction from the K45V classification to K40V (Supplemental
Answer, pp. 3 and 4).
9.
In April 2008,
Respondent’s Accounting Service Center issued Petitioner an invoice alleging
overpayments totaling $14,296.59 for the period from Pay Period 9 of 2006
through Pay Period 2 of 2008 (Supplemental Answer, p.1). In May 2008, the Lebanon Postmaster issued
Petitioner a letter of demand based on that invoice (Respondent’s Answer).
10.
Following a
grievance proceeding, Petitioner’s union representative and Respondent agreed
to a settlement under which Petitioner would pay the amount of $12,000 (Tr. 6),
which Petitioner declined to accept. In
a Notice of Involuntary Salary Offsets dated October 9, 2008, Respondent
demanded the payment of the reduced amount of $12,000 (Respondent’s Answer; Tr.
6).
11.
Petitioner filed a timely Petition under the
Debt Collection Act of 1982.
DECISION
In a Debt Collection Act case,
Respondent carries the burden of establishing that a debt exists. Debbie Eccles, P.S. Docket No. 99-148
(August 26, 1999). The parties do not
dispute that the figure 370 for Loading Time on the 2006 PS Form 4241-A was an
error. Likewise, the parties do not
dispute that the figure 53 on the 2008 PS Form 4241-A is an accurate reflection
of Loading Time for Petitioner’s route for the period between April 2006 and January
2008. The result of the correction of that
error is that Petitioner’s route was reduced from an evaluated K45V to a K40V
for calculation of compensation. The
Postal Service calculated that the reduction created an overpayment of
compensation to Petitioner of $14,296.59 for Pay Period 9 of 2006 through Pay
Period 2 of 2008. That calculation was based
solely upon the error in the 2006 PS Form 4241-A related to Loading Time. While the record is silent on the precise method
of calculation of that debt, I find that the Postal Service has met its burden
as to the debt and amount of the debt.[5]
Respondent having established the
existence of the debt, the burden shifts to Petitioner to show that the debt is
inaccurate, or that she has a defense to the collection that would render the
debt uncollectible.
Petitioner and Respondent both acknowledge that the
error was made by the Postal Service.
While the Postal Service alleges that Petitioner either knew or should
have known about the error at the time she signed the RDS Report, I find that
Petitioner gave credible testimony that she did not notice the error at the
time she signed the RDS Report. However,
that finding does not alleviate Petitioner of responsibility for the debt. The fact that Petitioner was overpaid as the
result of the error is the determining factor.
Absent a defense to that debt, i.e., error in calculation of the debt, Petitioner
is liable.
Petitioner presents no evidence to support a finding
in her favor on the existence or accuracy of the debt. While Petitioner did testify that she has “no
confidence” in the route evaluations conducted on her route, and testified that
she was never given paperwork in a timely manner by the Postal Service about
the route evaluation, she did not present any evidence to support a claim that
the route evaluations were in error. To
the contrary, her testimony supports the figures presented by Respondent. Likewise, there is nothing in the record to
support a finding that the evaluation conducted in 2008 was in error, or that
the final classification used to calculate the overpayment was in error.
Petitioner received the benefit of the overpayment
for the period in question, and, in fact, received an additional $2,296.59 that
Respondent does not seek to collect in this action. Although the Postal Service was at fault in
its calculation of Loading Time on the 2006 PS Form 4241-A, and in the entry of
data associated with that figure, the debt itself is not in dispute.
The Petition is denied as to Petitioner’s claim for
relief from the debt and Respondent may collect $12,000 by administrative
offset.
Respondent proposes to collect by
administrative offset $208.60 per pay period from Petitioner’s salary to
satisfy the debt. Respondent alleges
that this proposed offset schedule represents 15% of Petitioner’s “disposable pay”
as that term is defined in the Employee
and Labor Relations Manual (ELM), §451.4c.
Petitioner claims that the proposed administrative offset would create “severe
financial hardship.”[6] Petitioner proposes an alternative offset
schedule of $25 per pay period until the debt is satisfied. The burden of establishing severe financial
hardship is on Petitioner. 39 C.F.R. §961.4(b)(8).
To evaluate whether severe financial
hardship exists, Petitioner is required to submit information relative to: (1)
income from all sources; (2) assets; (3) liabilities; (4) number of dependents;
and (5) expenses for food, housing, clothing, transportation, medical care, and
exceptional expenses, if any.
Petitioner stated that her disposable pay is $3,200
per month. She submitted expenses
totaling $3,491.64 per month. However,
several of the expenses do not appear to be contemplated by the regulations in
the calculation of severe financial hardship.[7]
My calculations bring a total of $2,613.13 in monthly
expenses for essential material needs, or approximately $1,207 per pay period. Given Petitioner’s evidence that her disposable
pay is $3,200 per month, or approximately $1,477 per pay period, this leaves Petitioner
with $270 per pay period for payment of the debt. While this sum would be more than the $208.60
offset sought by Respondent, Petitioner has offered testimony that her route is
likely to be evaluated downward, and that she anticipates a corresponding
salary decrease as a result.
Respondent does not dispute the figures
submitted by Petitioner in the record or Petitioner’s testimony regarding her
upcoming salary decrease. Respondent
also does not dispute the claims by Petitioner that the proposed offset would
create severe financial hardship. Respondent’s
only objection is to Petitioner’s proposal to pay only $25 per pay period. Respondent’s position is that any administrative
offset schedule “can’t be dragged out for 10 or 20 years.” I agree with Respondent that the timeframe
proposed by Petitioner, at $25 per pay period, would result in an unreasonably
long delay in repayment.[8]
Nevertheless, I find that Petitioner
has established sufficient evidence of severe financial hardship to warrant a
reduction in the amount collected by administrative offset per pay period. Petitioner testified that while her financial
situation was difficult at the present time, and may get worse before it gets
better, she also suggested that she may be capable of making larger payments at
some point in the future when her financial situation improves. Taking into consideration Petitioner’s
current financial situation and the size of the debt to be collected, some
relief is in order. However, a
significant reduction in the administrative offset schedule should not continue
so as to create the unreasonable delay objected to by Respondent. Therefore, I find that Respondent may collect
the debt by administrative offset according to the following graduated offset schedule:
$75 for 26 consecutive pay periods and
$150 for the next 67 consecutive pay periods.
This
graduated offset schedule permits Petitioner to prepare financially for a
larger offset, but keeps the payment of the debt on a schedule for full
repayment in approximately 42 months.
The Petition is denied as to
Petitioner’s claim for relief from the debt and allowed as to her request for an
alternative offset schedule. Respondent
may collect the entire debt of $12,000 by administrative offset from
Petitioner’s salary, but may
do
so only in accordance with the graduated offset schedule reflected in this
Decision.
James G. Gilbert
Chief Administrative Law
Judge
[1] In the Notice of Involuntary Administrative Salary
Offsets, Respondent elected to seek collection on the $12,000 only, and not the
total $14,296.59 debt figure cited in the Notice. See Findings of Fact ¶10, supra.
[2] The hearing was conducted by Chief Administrative
Law Judge Bruce R. Houston via speaker-telephone from the Judicial Officer
office in
[3] References to the hearing transcript are “Tr.
__.” Documents attached to Respondent’s Supplemental
Answer dated April 10, 2009, are numbered consecutively by page, and will be
referred to as “Supplemental Answer, p. __.”
Other documents in the record will be referred to by date and/or
description as necessary.
[4] The RDS Report signed by Petitioner is dated
February 7, 2006. It appears from the
testimony and documents that this date is an error as it pre-dates the actual
evaluation. The true date of
Petitioner’s execution of the document is not clear, however, Petitioner does
not dispute the validity of her signature on the document, or that the document
accurately reflects the evaluation figures on PS Form 4241-A.
[5] The Postal
Service submitted evidence that Petitioner was overpaid for pay periods 09/2006
through 02/2008 (Supplemental Answer, p.
4). The Postal Service also submitted
Rural Carrier Evaluated Schedules with effective dates for pay periods 07/2006,
19/2006, 25/2007, and 07/2008 (Supplemental Answer, pp. 18, 19, 6, 7
respectively). There is nothing in
the record that explains how the Postal Service calculated the specific debt of
$14,296.59 alleged in this matter. Petitioner
did not challenge the debt figure identified by the Postal Service nor has she
raised its calculation as an issue in this case. A review of the evidence submitted, however,
supports a finding that the debt was at least in the amount sought to be
recovered by Respondent in this case (Supplemental
Answer, pp. 6-7, 18-19).
[6] “Severe Financial Hardship” is defined as “an employee’s inability to meet the essential material
needs of the employee and his or her spouse and dependents because of offsets
against pay. These essential material needs are food, housing, clothing,
transportation, medical care, and any exceptional expenses.” ELM §451.4h.
[7]
As best as can be gleaned from the figures submitted by Petitioner, the
following appear to be her monthly expenses covered by the regulations: Food - $200; Housing - $1,005.53 mortgage
plus $490 real estate taxes; Transportation - $400 gas, $525 Auto Van, $408.05
Truck Loan, $291.34 Auto Insurance. The figures submitted pertaining to
personal loans, credit card debt, cellular telephone, and rubbish collection,
along with certain items that are undefined such as “Citi Flex” and “Summit
Coll.” do not appear to be “essential material needs of the employee, and his
or her spouse, and dependents” absent more detailed information that was not
submitted by Petitioner. ELM §451.4h. It was also unclear whether the mortgage
payment is the responsibility of the ex-husband co-signer on the mortgage, or
whether Petitioner pays the mortgage.
The same issue arises with the Truck Loan. However, given the testimony that Petitioner’s
ex-husband is unemployed, I will assume for these purposes that Petitioner pays
half the mortgage and half of the truck loan. Petitioner submitted no evidence
regarding medical expenses, clothing, or exceptional expenses. Petitioner does
mention a dependent with medical issues but no figures were presented for any
corresponding expense related to that condition.
[8] At $25 per pay period, it would take 480 pay periods
to satisfy the debt, which is roughly the equivalent of 18 years.