ADDENDUM TO
RECORD OF PROCEEDINGS
AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS

IN THE MATTER OF:				DOCKET NUMBER:  BC-2001-00580
								INDEX CODE 128.10
	 							COUNSEL:  None

								HEARING DESIRED:  No

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APPLICANT REQUESTS THAT:

In the applicant’s request for reconsideration, he requests reimbursement for approximately $6,244.22, plus statutory interest.
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STATEMENT OF FACTS:

The applicant was a Reserve colonel who was seriously injured in a head-on collision on 14 Sep 97 while en route to Reserve duty at Columbus AFB, MS.  He was authorized incapacitation pay due to the injuries sustained in the line of duty.  Title 3, USC, Section 204(i)(2) limits incapacitation pay (IP) to six months unless the Secretary approves an extension.  

The applicant received IP from 20 Sep 97 until 19 May 98.  He applied for additional payments beyond the six-month window.  However, authorization for IP terminated on 26 May 98 when he was placed on the Temporary Disability Retired List (TDRL) on 27 May 98 with a 40% rating.  

According to DFAS, the applicant was paid $50,669.90 in IP for the period 20 Sep 97 through 19 May 98.  DFAS learned the applicant earned income from civilian sources during this time period that should have been deducted or offset from the total IP.  Title 37, USC, Section 204(g)(2), states that pay and allowances shall be reduced by “income from an income protection plan, vacation pay, or sick leave which the member elects to receive . . . .”  DFAS also learned that USAA (automobile insurance company) had paid the applicant $25,000 for lost income/bodily injury.  DFAS asked the applicant to provide documentation from his employer and insurance company, but he initially refused.  Around 29 May 01, he submitted a statement claiming he had not earned civilian income during the relevant time period.  

However, because DFAS suspected the applicant had earned income from his civilian employer, the Defense Investigative Services (DIS) initiated an investigation, which confirmed the applicant earned pay from his civilian employer and received at least $9,921 in outside employment.  Although the DIS could not provide an exact figure of the applicant’s civilian employment, DFAS created a debt for the entire $50,669.90 until such time as the applicant cooperated.  As a result, his retired pay was offset to collect the debt.

The applicant submitted a 23 Feb 01 appeal to the AFBCMR requesting his remaining debt of $39,909.33 for IP from 20 Sep 97 through 19 May 98 be cancelled, he be paid IP for 20-26 May 98, and he be refunded $10,760.00 in recouped funds, with interest at 12%.  On 20 Jul 02, the Board denied the applicant’s requests, indicating the applicant’s submission was unclear and incomplete.  However, the Board indicated their willingness to reconsider the case should the applicant submit additional documentation clarifying his contentions and the circumstances of his case.  However, the applicant never responded.

For an accounting of the earlier decision by the Board, see the Record of Proceedings at Exhibit F.

On 20 Aug 02 and 21 Jan 03, the AFBCMR Staff forwarded copies of the case file to AFLSA/JACL for litigation pursuant to their requests.

The following information was extrapolated from the AFLSA/JACL (Exhibit H) and the HQ USAF/JAA (Exhibit I) advisory opinions and attachments, which provide greater details.

The applicant initially filed a lawsuit in Florida District Court to prevent DFAS from collecting on the $50,669.90 debt established to recoup his IP.  He also sought pay for 20-26 May 98.  The Florida Court ruled it did not have jurisdiction and that exclusive jurisdiction was with the Court of Federal Claims.

During the Court of Federal Claims proceedings, AFLSA/JACL obtained information from the applicant’s employer suggesting he earned roughly $22,000 in the form of paid leave.  However, the accuracy of the figure was difficult to verify because the applicant may have paid money back to his employer to convert some amount of paid leave to unpaid leave.  On 23 Apr 03, the Court of Federal Claims concluded the $25,000 USAA payment should not have been considered income within the meaning of Section 204(g)(2) and DFAS was notified the applicant was entitled to have his total debt reduced by the $25,000 USAA insurance benefit.  However, the court ruled against the applicant with regard to the remainder and held the Air Force properly created a debt for $25,669.90.  

As a result, DFAS reduced the debt owed by $25,000 to reflect the court’s decision allowing the applicant to receive the USAA payment without impact on his IP.  According to DFAS-POCC/DE’s advisory (Exhibit M), the applicant’s original debt of $50,669.90.90 was for basic pay (BP) only.  He also received approximately $8,997.65 in Basic Allowance for Quarters (BAQ), Basic Allowance for Subsistence (BAS), and Variable Housing Allowance (VHA).  He was credited for approximately $3,876.23 for Federal Insurance Contributions Act (FICA - Social Security) taxes, so his debt was only increased by $5,121.52.   The debt of $30,791.42 has been fully collected.  

Following the above ruling by the Court of Federal Claims, the applicant filed a new petition on 3 Jun 03, according to AFLSA/JACL, seeking a ruling to prevent the Air Force from asserting a $28,553.52 medical lien that threatened to impact his insurance recovery ($25,000) from USAA.  The medical lien was filed on 21 May 03, pursuant to the Federal Medical Care Recovery Act.  This claim is filed in most accidents involving military members, but the claim was not initially pursued in this case because the US had ostensibly received full benefit of the payment from USAA through the reduction of IP.  On 13 Aug 03, the court denied the applicant’s new petition; however, the Air Force later dropped the claim against USAA.

On 15 Jul 04, the AFBCMR Staff received the applicant’s request for reconsideration.  In a letter dated 3 Jul 04, the applicant asserted the US Court of Federal Claims ruled in his favor on the issue of USAA payments ($25,000) not being “income from an income protection plan” and ordered repayment.  He contends this leaves a balance owed him of $30,791.42 plus statutory interest.  He contends none of the payments were within the definitions of “vacation pay, or sick leave which the member elects to receive.”  He claims the recovery of the $30,791.42 from his retired pay was not authorized.

The applicant’s latest submission, with attachments, is at Exhibit G.

The AFBCMR Staff forwarded the applicant’s case to AFLSA/JACL and HQ USAF/JAA on 12 Aug 04 for evaluation and comments.

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AIR FORCE EVALUATION:  

AFLSA/JACL’s evaluation provided information on the applicant’s court proceedings, but indicated it should not be considered to constitute legal advice.  Some of that information is summarized in the Statement of Facts section of this Addendum to Record of Proceedings.

A copy of the complete evaluation, with attachments, is at Exhibit H.

HQ USAF/JAA indicates the applicant’s original request was the basis of his lawsuit against the US.  The Court ruling, as set above, addressed his original claim and further comment is unnecessary.  The applicant now requests reconsideration of his earlier petition to the AFBCMR based on newly discovered evidence.  JAA notes the reconsideration request claims a different amount ($30,791.42) than the original appeal ($55,791.42).  The claimed newly discovered evidence are deposition exhibits deposed in Jun 02 and were a part of the administrative record considered by the Court of Federal Claims in rendering its decision.  Again, the Court’s decision stated the USAA payment of $25,000 was not earned income and the balance of $25,669.90 was attributable to and/or subject to the applicant’s earned income from his civilian employer, and a proper debt owed to the US.  Assuming the applicant’s current claim for repayment is, in part, for the court-established valid and collected debt of $25,669.90, that portion of his reconsideration request should be denied.  The balance, $5,121.52, may be related to the applicant’s IP claim for the month of May 98.  However, the basis for this part of his reconsideration request is unclear and the Board should consider requesting him to clarify and substantiate this claim.

The copy of the complete evaluation is at Exhibit I.

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APPLICANT'S REVIEW OF AIR FORCE EVALUATION:

The applicant’s rebuttal contends the $5,121.52 questioned by HQ USAF/JAA is made up in part of the $3,111.12 of pay for 15-26 May 98 (12 days @ $259.26 = $3,111.12) and the $1,963.83 of FICA for the $25,669.65, which was recovered as a debt.  He claims the FICA for the collected debt was never refunded to him, and the $3,111.12 added to the $1,963.83 equals $5,074.95 and approximates the $5,121.52.   

The applicant’s complete review is at Exhibit K.

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ADDITIONAL HQ USAF/JAA EVALUATION:

HQ USAF/JAA reiterates that the applicant’s original debt of $50,669.90 was reduced to $25,669.90 and, to the extent that his reconsideration request was for the repayment of this validly established debt owed to the US, it should be denied.  The applicant claims a portion of the $5,121.52 balance is $3,111.12 for IP for 15-26 May 98.  The administrative record reflects the applicant was in a “leave without pay” status from his employer and IP for this period appears properly payable.  The applicant claims the remaining $2,010.40 is owed as “...FICA deductions for the $25,669.90, which was recovered from [him] as a debt....”  If FICA deductions were made from IP and then collected from him as a part or portion of the $25,669.90 debt, reimbursement may be appropriate.  However, JAA concludes that the amount of IP for the period in question, as well as whether (and amount) of any FICA deductions were made and the potential reimbursement are matters best determined by DFAS.

A complete copy of the evaluation is at Exhibit L.

DFAS-POCC/DE advises the applicant was paid IP through 19 May 98, which he has acknowledged.  His entitlement was stopped at that time because he failed to provide a signed letter for his statement of earned income for the entire period prior to 20 May 98.  DFAS’ records indicate he has not provided verification from the Florida Attorney General’s Office and/or USAA indicating he did not receive income between 20 Sep 97 to 26 May 98.  He claims he did not receive pay from his civilian employer from 16-25 May 98 because he was in a no-pay status during that time.  Due to his not providing the appropriate information requested concerning his civilian earnings, any IP received during this time is collected and payment cannot be made until adequate proof of civilian earnings is provided.  In the absence of such proof for the 20 Sep 97 through 26 May 98 period, any IP paid must be collected.  DFAS summarizes the applicant’s indebtedness and adjustments thereto as follows:

	 $50,669.90		Original amount of debt
	 $ 8,997.75		Debt increased due to allowances paid but not
								included in original debt
	-$ 3,876.23		Refund for FICA deductions
	 $55,791.42		Final debt amount
	-$25,000.00		Debt reduced due to court ruling/USAA benefit
	 $30,791.42		Total amount of debt; collected from applicant
	
Based on the fact the applicant failed to provide information concerning his civilian earnings during the time he received IP, and that he initially claimed he had no civilian earnings, DFAS recommends denial.
  
A complete copy of the evaluation is at Exhibit M.

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APPLICANT’S REVIEW OF THE ADDITIONAL EVALUATIONS:

The applicant disagrees with the DFAS advisory.  The verification from the FL Attorney General’s office was provided in a submitted spreadsheet.  The verification from USAA was made unnecessary by the US Court of Claims ruling.  He believes DFAS recognizes that he is entitled to IP for 20-26 May 98 inclusive, which he asserts totals $1,814.82.  Any increase in the debt due to allowances paid would not be for the entire original debt of $50,669.90 since it was reduced by $25,000.00.  He breaks down his debt and refund as follows:

	 $50,669.90		Original amount of debt per DFAS
	 $ 8,997.75		Debt increased due to allowances paid
	-$ 3,876.23		Refund for FICA deductions
	-$ 1,814.82		Pay and allowances for 20-26 May 98
	-$ 4,439.40		Allowances erroneously collected on the
								$25,000
	 $49,537.20		Adjusted amount of debt
	-$25,000.00		Reduction for court rulings (USAA)
	 $24,547.20		Amount authorized to be collected per DFAS

He contends the collection of $30,791.42 exceeds the $24,547.20 by $6,244.22, and interest is due on this amount since 1998.

The applicant’s complete response is at Exhibit O.

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THE BOARD CONCLUDES THAT:

After a thorough review of the evidence of record and the applicant’s submission, we are not persuaded reimbursement is warranted.  The applicant’s contentions, and the changing amounts of his claims, were duly noted.  However, we do not find his assertions, in and by themselves, sufficiently persuasive to override the decision of the Court of Federal Claims and the rationale provided by DFAS.  The court concluded the $25,000 USAA payment should not have been considered income and the applicant’s debt was reduced accordingly by that stated amount, not by a certain percentage.  The court ruled against the applicant with regard to the remainder and held the Air Force properly created a debt for $25,669.90.  DFAS increased the debt by $5,121.52 for allowances not included in the original debt.  DFAS recommends the applicant’s appeal be denied because he failed to provide information concerning his civilian earnings during the time he received IP from 20 Sep 97 through 19 May 98, and he initially claimed he had no civilian earnings.  While the entitlement to IP for 20-26 May 98 exists, payment is contingent on the applicant providing information regarding civilian earnings, which he has apparently refused to do to DFAS’ satisfaction.  We are not persuaded the applicant has been entirely forthcoming throughout these proceedings and his latest inconclusive submission has not convinced us to override the determinations of the court and DFAS regarding this case.  We therefore agree with the recommendation of DFAS and adopt the rationale expressed as the basis for our decision that the applicant has not sustained his burden of having suffered either an error or an injustice.  In view of the above and absent persuasive evidence to the contrary, we find no compelling basis to recommend granting the relief sought.

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THE BOARD DETERMINES THAT:

The applicant be notified that the evidence presented did not demonstrate the existence of material error or injustice; that the application was denied without a personal appearance; and that the application will only be reconsidered upon the submission of newly discovered relevant evidence not considered with this application.

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The following members of the Board considered this application in Executive Session on 17 May 2005, under the provisions of AFI 36-2603:

The following documentary evidence relating to AFBCMR Docket Number BC-2001-00580 was considered:

 Exhibit F. Record of Proceedings, dated 10 Jul 02, w/atchs.
 Exhibit G. Applicant's Letter, dated 3 Jul 04, w/atchs.
 Exhibit H. Letter, AFLSA/JACL, dated 29 Sep 04, w/atchs.
 Exhibit I. Letter, HQ USAF/JAA, dated 19 Oct 04.
 Exhibit J. Letter, AFBCMR, dated 27 Oct 04.
 Exhibit K. Letter, Applicant, dated 18 Nov 04.
 Exhibit L. Letter, HQ USAF/JAA, dated 27 Dec 04.
 Exhibit M. Letter, DFAS-POCC/DE, dated 18 Feb 05.
 Exhibit N. Letter, AFBCMR, dated 22 Feb 05.
 Exhibit O. Letter, Applicant, dated 8 Mar 05.

                                   
                                   Panel Chair