RECORD OF PROCEEDINGS
         AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS

IN THE MATTER OF:	DOCKET NUMBER:  BC-2002-01710
		INDEX NUMBER:  128.10
	XXXXXXXXXXXXX	COUNSEL:  

	XXX-XX-XXXX	HEARING DESIRED:  Yes

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APPLICANT REQUESTS THAT:

The recoupment of funds expended for her education through the Armed Forces Health Professions Scholarship Program (AFHPSP) be terminated and that her tax refunds taken for payment toward this debt be refunded.

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APPLICANT CONTENDS THAT:

Applicant’s legal counsel submits a four-page brief, a letter prepared by the applicant, and seven exhibits in support of applicant’s appeal.  He states that several issues are significant in the applicant’s case.  After the applicant filed her annually required statement of medical condition in June 1994 stating that she had been diagnosed with diabetes mellitus, she was found to be medically disqualified for military duty without any hearing or opportunity to discuss her medical condition in person.

She would have requested a hearing or personal interview to defend her position that she could perform well as an Ear, Nose, and Throat (ENT) specialist in the Air Force if she had been given that opportunity.  She currently maintains a full time civilian surgical practice.  The applicant did submit a letter from a physician confirming that the onset of her diabetes in Mar 94 was a very mild case that was well controlled with an excellent prognosis.  There was no indication in the notification letter or in the disqualification determination that the letter from the applicant’s physician was considered.

The Notice of Proposed Discharge, dated 28 Sep 94, and received by the applicant on 24 Nov 94, did not mention possible recoupment of HPSP funds.  During an inquiry conducted in Jan 96, the Deferred Physician Program Manager advised the applicant of her impending discharge and stated that she would have no further obligation to the Air Force.  When contacted later by the Inquiry Officer, he stated that he and the applicant never discussed recoupment of funds.  He did not deny telling the applicant that she had no further obligation to the Air Force.

The applicant was advised of certain rights when she received the notice of proposed discharge in Nov 94.  The right to a hearing on the merits of the finding of medical disqualification was not one of the rights she was given.  The “right to review” provision clearly states that the administrative discharge board was not a “physical evaluation board nor is it a board of inquiry.”  It further states that the board is not qualified or authorized to make medical determinations.”  The function and duties of the board were “limited to making findings and recommendations concerning whether a medical determination of disqualification has been made by the appropriate surgeon and is evidenced in the manner prescribed by AFR 160-43, Medical Examinations and Medical Standards.”  Disqualification had already been determined by the Air Force physician on 12 Jul 94.  The Notice of Proposed Discharge gave her the option to transfer to the Retired Reserve or tender her resignation.  She made neither election and was involuntarily discharged, as provided in the memorandum, on     21 Feb 95, having no idea that her discharge would result in claimed recoupment.  She also did not receive notice that the administrative discharge board was apparently convened on 17 Jan 95 to consider her discharge.  After her discharge she received a notice dated 23 Feb 95 saying recoupment was not excused.  This was followed one month later on 28 Mar 95 by notification of indebtedness claiming $91,852.92 was owed and requiring payment of the total amount by 28 Apr 95.  Interestingly, that notice contained a summary of her medical school expenses dated 20 Jul 94, which was eight days after the determination of disqualification by the Air Force physician.

The applicant signed a HPSP contract on 2 Feb 88 that contains the following provision at paragraph 6(b):

	  “Should I become unable to commence the period of ADSC specified in the contract because of physical disqualification I agree to reimburse the United States in one lump sum for a total cost of advanced education paid by the U.S. Government as specified in 10 USC 2005.”

10 USC 2005 entitled Advanced Education Assistance: active duty agreement; reimbursement requirements provides in paragraph (a)(3):

	  “That if such a person, voluntarily or because of misconduct fails to complete the period of active duty specified in the agreement, such person will reimburse the United States in an amount that bears the same ratio to the total cost of advanced education provided such person as the unserved portion of active duty bears to the total period of active duty such person agreed to serve.”

Counsel indicates that the applicant was discharged involuntarily based on the previously determined medical disqualification and not for misconduct.  He references a case in which the Federal Court denied recoupment of education costs where a midshipman had been discharged for failure to maintain weight standards.  The Court determined that his failure to maintain weight standards was “neither voluntary” nor “misconduct” provided in the statute.  Counsel states that obviously the applicant’s contracted diabetes was neither voluntary nor misconduct.  Therefore, the determination of the Air Force to medically disqualify the applicant for her illness and then compel reimbursement for her educational expenses did not come within the authorization of 10 USC 2005(a)(3).  Paragraph 6(b) of the HPSP contract therefore included within the agreement a provision that was not authorized and is therefore void and unenforceable.  Counsel asserts that any reliance upon 10 USC 2005(a)(4) that permits the Secretary of the Air Force (SECAF) to include “such other terms and conditions as the Secretary concerned may prescribe to protect the interests of the United States” is misplaced.  The Secretary certainly would not be authorized to include a provision in the contract that provided for recoupment in cases where an officer was involuntarily discharged for medical reasons when the statute otherwise provides that such discharge must be on the basis of a voluntary failure to complete active duty or because of misconduct.  Such a reliance on that provision would imply that the Secretary was authorized to create Federal Legislation.

It is further provided in 10 USC 2005 at paragraph (g)(2):

	  “The Secretary of each military department shall ensure that a member of the armed forces who may be subject to reimbursement requirement under this section is advised of such requirement before (1) submitting a request for voluntary separation or (2) making a decision on a course of action regarding personal involvement in administrative, nonjudicial, and judicial action resulting from alleged misconduct.”

Counsel opines that if such notification is required in the case of a request for voluntary separation or for misconduct, it is obvious that the Secretary is obligated to ensure such a requirement is met in the case of involuntary discharge for medical disqualification.  Since the Air Force failed to give the applicant such required notice and opportunity to be heard both on the issue of her medical disqualification or on the subsequently ordered recoupment of her medical expenses, recoupment action should be terminated.

In the letter prepared by the applicant, dated 15 Apr 02, she states five reasons why she does not think that the funds expended on her education under the HPSP should be recouped:

	  a.  Her Air Force recruiter assured her that unless she refused to fulfill her active duty commitment, there was no way that she or her family would be asked to repay her scholarship monies.

	  b.  The Air Force did not give her a hearing to discuss her discharge.

	  c.  The Air Force did not inform her that they would be asking for recoupment of the scholarship money; furthermore, when she asked what her responsibilities would be, the Air Force representative who informed her of her discharge told her she would just receive some papers.  None of the papers said anything about recoupment except for those received six months after her discharge.

	  d.  There is currently an ENT at Wright Patterson AFB who developed diabetes during his training.

	  e.  She was told by a retired Air Force ENT that during her year of training the Air Force had too many people go into ENT.  He told her that the Air Force saw her diagnosis as an opportunity to get rid of one ENT, get their money back and not be responsible for her health care as a diabetic.

Counsel and applicant’s complete submission, with attachments, is at Exhibit A.

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STATEMENT OF FACTS:

The applicant signed a Health Professions Scholarship Contract on 22 Feb 88.  She was appointed a second lieutenant as a Reserve of the Air Force on 7 Jun 88 and began her participation in the HPSP on 22 Aug 88 when she entered medical school.  The applicant received her medical degree on 6 Jun 92 and was granted a five-year deferment from commencing active duty in order to pursue an otolaryngology residency.

On 25 Aug 94, the applicant was found medically disqualified for continued military service under AFR 160-43, paragraph 4-35C, because she was diagnosed with Diabetes Mellitus Controlled with Insulin.

On 28 Sep 94, a “Notice of Proposed Discharge” letter was sent to the applicant’s former address.  She did not receive the notice until Nov 94 after it was emailed.  The notice contained information regarding the applicant’s right to consult appointed military counsel, her right to an administrative discharge board, and her right to submit conflicting or rebuttal medical evidence to such board.  The applicant did not pursue any of the rights.

On 17 Jan 95, a Physical Disqualification Board recommended that the applicant be discharged from the Air Force Reserves with an honorable characterization.  She was discharged effective 21 Feb 95.

The applicant claims that she was not advised about recoupment until she received the 23 Feb 95 “Notification of Discharge.”  She also alleged that she never saw the summary of expenses for her HPSP scholarship until 28 Mar 95.  On 6 Dec 95, HQ ARPC/CC appointed an Inquiry Officer (IO) to investigate the facts and circumstances concerning recoupment of education assistance provided to the applicant under the HPSP.

The IO found that the Air Force expended $91,852.92 in medical education costs on behalf of the applicant.  The applicant did not dispute the amount owed, but did dispute the appropriateness of her discharge.  The IO concluded that the Air Force is entitled to recoupment from the applicant.

Additional information pertaining to this case is contained in the evaluation prepared by the appropriate office of the Air Force found at Exhibit C.

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AIR FORCE EVALUATION:

AFPC/DPMAF2 recommends denial of the applicant’s request.  Applicant acknowledged the Armed Forces Health Professions Scholarship and Financial Assistance Contract on 22 Feb 88.  Paragraph 6(b) states, “Should I become unable to commence the period of Active Duty Service Commitment (ADSC) specified in this contract because of physical disqualification, I agree to reimburse the United States in one lump sum for the total cost of advanced education paid by the US Government as specified in 10 USC 2005.

Additional information is provided in an attached memorandum prepared by the Chief, Physical Education Branch, AFPC/DPAME.  He indicates that applicant’s counsel states that the applicant was first notified of her right to apply to the BCMR in Nov 01.  The applicant’s HPSP contract clearly identifies in item 13 the BCMR as an avenue regarding disputes over the HPSP contract.  The HPSP contract was discussed at great length during the inquiry in 1996.  Counsel and the applicant were present during the inquiry.  Details surrounding recoupment were identified.

AFPC/DPAME states that items 1 through 4 of the applicant’s     15 Apr 02 letter were previously addressed.  The contract clearly states that the applicant agreed to reimburse the Government in one lump sum for the cost of education, if she were unable to commence the period of ADSC because of physical disqualification.  Applicant’s assertion that her recruiter assured her that she would only have to repay if she refused to fulfill her commitment is unsubstantiated.  He feels that the medical condition of the Air Force ENT the applicant references is not relevant to the discussion of her recoupment.  Applicant’s item 5 is a new assertion.  During the inquiry, she gave a statement under oath indicating that she felt the Air Force was using her medical disqualification as a means to reduce its workforce numbers.  Her statement in the 15 Apr 02 letter that a retired Air Force ENT saw her diagnosis as a way to get rid of one ENT, get their money back, and not be responsible for her healthcare as a diabetic is the first assertion that someone in the Air Force felt that her diagnosis was an opportunity to decrease the number of ENT physicians in the Air Force.  She does not present any evidence to substantiate this assertion.

The complete evaluation, with attachments, is at Exhibit C.

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APPLICANT'S REVIEW OF AIR FORCE EVALUATION:

Counsel responded to the Air Force evaluation.  He states that as indicated in their original application, paragraph 6(b) of the HPSP contract is unenforceable because recoupment for involuntary discharge for medical disability is not authorized by 10 USC 2005.  In support of that argument counsel attached a copy of a letter signed by the Undersecretary of the Air Force, Antonio Handler Chayes, dated 16 Sep 79, to the President of the Senate, Walter Mondale requesting authorization by the Department of Defense for enactment of 10 USC 2005 to authorize an agreement in writing requiring reimbursement, under certain specified conditions, for costs of advanced education sponsored by the Armed Forces.  Counsel asserts that the language contained in the letter clearly indicates that it was not the intent of the legislation to require reimbursement for failure to serve on active duty for involuntary reasons, including medical conditions.

AFPC/DPAME suggests that the reference in the applicant’s 15 Apr 02 letter to the medical condition of another ENT serving in the Air Force who has diabetes “is not relevant to the discussion of recoupment.”  The applicant contends that it is relevant as it shows she was treated differently without explanation.  Counsel attaches a letter from this physician in support of applicant’s appeal.

The Air Force Regulation referred to as the basis of the applicant’s disqualification apparently was not mandatory but discretionary.  Since the regulation has been replaced by AFI 48-123, counsel states that he and applicant must assume that the current Air Force instruction regarding medical disqualification for Air Force Reserve personnel is the same or substantially similar.  It is undisputed that the applicant was given no hearing or opportunity to personally present her position that she was able to perform her duties despite her diabetes and was fit for active duty service.  The determination that she was medically disqualified was made without an examination.  It was apparently made by the Air Force physician without considering any other information other than the fact that she had developed diabetes. Given that the applicant’s physician indicated that the applicant’s diabetes was well controlled, it cannot be said that this was a proper exercise of the Air Force physician’s authority.

Counsel’s complete response, with attachments, is at Exhibit E.

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ADDITIONAL AIR FORCE EVALUATION:

The Board forwarded counsel and applicant a copy of a decision by the Assistant Secretary (Manpower, Reserve Affairs, Installations, and Environment) in a similar case.  In this case, the applicant was similarly medically disqualified and required to reimburse the Government.  Although the AFBCMR voted to grant the applicant relief, the Assistant Secretary determined that the applicant had entered into a clear contract that provided that, in the eventuality she became disqualified, she would reimburse the Government for the cost of her medical education to that point.

The Assistant Secretary’s decision is at Exhibit F.

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APPLICANT'S REVIEW OF AIR FORCE EVALUATION:

A copy of the Assistant Secretary’s decision was forwarded to the applicant and counsel on 25 Jul 02 for review and comment within 30 days.  Although the applicant’s response to the initial Air Force evaluation was more than 30 days after the additional evaluation was forwarded, there is no specific response indicated to this evaluation.

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SECOND ADDITIONAL AIR FORCE EVALUATION:

Pursuant to the Board’s request, HQ USAF/JAG provided an evaluation of the applicant’s appeal.  They recommend that the applicant’s request be denied.

Contractually, paragraphs 6(b) and 11 placed the applicant on notice that in the event she was physically disqualified, voluntarily or involuntarily separated, or separated in the interest of national security, reimbursement for her advanced education was required.  The Notice of Proposed Discharge served on the applicant did not notify her of the HPSP debt or the possibility of recoupment, but none was required by statute or regulation.  Applicant also claims that during a telephone conversation with the Air Force Deferred Physician Program Manager, on 24 Jul 94, that she was told of her discharge and that she owed no further obligation to the Air Force.  This individual denied to the Inquiry Officer making any such statement and “recoupment does not fall under his area of responsibility.”  The remaining issue is whether statutorily the United States is barred from recoupment under 10 USC 2005.

Applicant’s counsel contends recoupment for advanced education is limited and only if the individual “voluntarily or because of misconduct fails to complete the period of active duty specified in the agreement.”  The underlying premise is simply incorrect.  Within the four corners of the contract, it was clearly the intention of the Air Force, and the understanding of both parties, that applicant was to reimburse the United States if she was physically disqualified or separated prior to serving her ADSC.  USC 2005(a)(4) grants the Secretary the authority to prescribe other terms and conditions as the Secretary concerned may prescribe to protect the interests of the United States.  Section (a)(4) was purposely designed to grant SECAF discretion because by their very nature, statutes cannot predict or envision every possible factual permeation and application.

While it is true that the applicant’s disqualifying condition was not a result of misconduct or voluntary action, it is also true that the condition arose through no fault of the government.  The issue is not one of fault or blame.  Here the parties to the contract entered into a clear document that provided that in the eventuality that the applicant became physically disqualified or for whatever reason separated prior to serving an ADSC, the applicant would reimburse the government for the costs of her advanced education.  There is strong public policy to recoup education costs in this and other similar cases.  The fact is the taxpayers have given applicant substantial monies for her education, from which she has, and will continue to benefit for years to come.  To permit the applicant to benefit from this education for years to come, at no cost to her, would amount to her being unjustly enriched.

The complete evaluation is at Exhibit H.

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APPLICANT'S REVIEW OF SECOND ADDITIONAL AIR FORCE EVALUATION:

Applicant’s counsel responded to the second additional Air Force evaluation from HQ USAF/JAG.

Counsel asserts that the evaluation from HQ USAF/JAG does not respond to the issue raised in point I of his 23 Oct 02 letter regarding the intent and purpose of the legislation regarding reimbursement of HPSP expenses as confirmed in the request submitted by the Under Secretary of the Air Force.  

No response having been submitted to this issue by HQ SAF/JAG, it must be assumed that it is agreed that the intent of 10 USC 2005 is to exclude reimbursement of the costs of advanced education as a result of disqualification for involuntary reasons such as medical conditions, including the applicant’s Diabetes Mellitus.  HQ USAF/JAG’s suggestion that 10 USC 2005(a)(4) grants SECAF the authority to prescribe “other terms and conditions” in the HPSP contract including, apparently, the right to compel reimbursement for involuntary disqualification is incorrect for two reasons:

	  1.  10 USC 2005 was amended 5 Nov 90 to add into subsection (a)(3) “or fails to fulfill any term or condition prescribed pursuant to clause (4).”  Subsection (a)(3) is the only provision of 10 USC 2005 that authorizes reimbursement of the cost of advanced education.  Subsection (4) authorizes the Secretary concerned to include in the contract “other terms and conditions” but does not deal at all with the subject of reimbursement.  If under subsection (4) the Secretary could require reimbursement for disqualification for involuntary reasons, this would render subsection (a)(3) superfluous and would negate the stated intent and purpose of the legislation as expressed in the letter of    16 Sep 79.

	  2.  The amendment to 10 USC 2005 of 5 Nov 90 authorizing the Secretary to include in the contract reimbursement for “any term or condition prescribed pursuant to clause (4)” was enacted two and one-half years after the applicant entered into her contract on 22 Feb 88.

Counsel asserts that it must therefore be concluded that the SECAF was without authority to include paragraph 6(b) in the HPSP contract that required reimbursement for involuntary physical disqualification and that provision must be considered unenforceable.

HQ USAF/JAG does not comment on the 12 Oct 00 decision reached by the Board in the similar case provided by the AFBCMR.  In that case the Board concluded that the applicant should have been relieved from any obligation for reimbursement of the cost of education after finding that the applicant’s medical condition was not voluntary or misconduct.

Applicant’s counsel asserts that HQ USAF/JAG’s reference to paragraph 11 of the HPSP contract is misplaced and that none of the provisions of paragraph 11 are relevant or applicable to the involuntary medical disqualification of the applicant.  He also references two other issues that he asserts HQ USAF/JAG failed to comment on.

Counsel’s complete response is at Exhibit J.

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THIRD ADDITIONAL AIR FORCE EVALUATION:

Pursuant to the Board’s request, HQ USAF/JAG provided an evaluation to address the following contentions made by applicant’s counsel:

	  a.  That it is not the intent of 10 USC 2005 as expressed in the legislative history to require reimbursement for failure to serve on active duty for involuntary reasons, including medical conditions.  What is the relevance of the letter from the Undersecretary of the Air Force, Antonia Handler Chayes, dated 16 Sep 79, which clearly states this condition.

	  b.  That the amendment to 10 USC 2005 authorizing the Secretary of the Air Force to include in the contract reimbursement for “any term or condition prescribed pursuant to clause (4)” was enacted more than two years after the applicant signed her contract.

	  c.  The relevance of the court’s decision in United States v. Charles C. Gears, where it denied an action by the United States to recover costs of education at the Naval Academy.

HQ USAF/JAG indicates that “admittedly” Ms. XXXXXXX’ letter does state that the intent of the [then] legislative proposal was not to include situations where an individual is discharged because of failure to meet physical standards.  However, there are other provisions in the letter that may help the Board in its deliberations, which they provide specific examples of.   They conclude that the true import of Ms. XXXXXXXX’ letter is the [then] proposed legislation was to insure the United States, after considering the equities, good conscience, and fairness to both parties, “received a fair return on the cost of education received by the person” and “a fair return on its investment.”  When the Board considers Ms.XXXXXXXX letter, in its entirety, the presumptive intent of 10 USC 2005, is to seek reimbursement of the costs of advanced education in an equitable manner.

Additionally, 10 USC 2005(a)(4) has been in effect since the legislation was enacted.  While Congress required certain provisions to be included in contracts for advanced education, from its inception the law also gave the Service Secretaries discretion to include any other provisions deemed necessary to protect the interests of the United States.  The SECAF was, therefore, well within his authority to require the applicant to sign an HPSP contract providing for such.  On 22 Feb 88, the applicant signed an HPSP contract and in paragraph 6(b), the applicant agreed that in the event of physical disqualification, regardless of nature or origin, to reimburse the United States, in one lump sum, the total cost of advanced education.  Paragraph 6(b), under which recoupment may be ordered, is a Section 2005(a)(4) provision.  The 1990 amendment to Section 2005(a)(3) to which applicant’s counsel alludes, affirmed the existing Air Force practice of including such a paragraph by codifying the Secretary’s authority to include such other contractual terms and conditions triggering reimbursement.  This is consistent with the legislative mandate to protect the interests of the United States and ensuring a fair return.

HQ USAF/JAG discusses the applicability of paragraph 11 of the applicant’s HPSP contract, which applicant’s counsel dismisses any reference to as “misplaced” stating, “none of the provisions of paragraph 11 are relevant or applicable to the involuntary medical disqualification” of applicant.  Paragraph 11’s involuntary separation provision for national security interests, is further evidence of the Secretary’s broad discretionary authority under Section 2005(a)(4) requiring HPSP participants to agree “to such terms and conditions as the Secretary concerned may prescribe to protect the interest of the United States.”

Contractually, both paragraphs 6(b) and 11 placed the applicant on notice that in the event she was determined physically disqualified (para 6(b)) or involuntarily separated “because retention is not clearly consistent with the interest of national security (para 11), reimbursement of the costs of her advanced education was required.  

HQ USAF/JAG also discusses examples of instances where the Secretary might use his discretion to excuse repayment, e.g., a debilitating injury that would preclude an individual from benefiting from their education.  HQ USAF/JAG further discusses the notification of discharge to the applicant, which included notice of the recoupment action.  An inquiry was conducted into the HPSP recoupment action, which eventually resulted in the SECAF ordering recoupment of money spent on the applicant’s advanced education.  The applicant has been afforded all procedural due process rights and, to date, all Air Force authorities have agreed that recoupment is appropriate and fair.

In regards to comparing the applicant’s case to that of a former Air Force physician who also suffered from insulin dependent diabetes but was permitted to serve on active duty, HQ USAF/JAG indicates that the distinction between the two cases is easily made.  The Air Force physician had already served on active duty for 10 years prior to developing diabetes and the processes are completely different.  That aside, a comparison of the two cases is inappropriate and should not divert the Board’s analysis of whether the applicant is obligated to reimburse the United States for the cost of her education.  They also caution that comparisons to other BCMR cases exonerating the applicant’s recoupment is similarly inappropriate.  The Board’s decisions are case and fact specific.

HQ USAF/JAG discusses the relevance of the court’s decision in United States v. Gears, a case in which the courts ruled that a midshipman’s failure to maintain weight standards was neither voluntary nor misconduct.  They indicate that the underlying reason the court rejected the government’s interpretation of “voluntary” was based on the confusion about the physical standards applicable to the midshipman and the absence of evidence that he knew his weight would result in discharge.  In the applicant’s case, there is no confusion as to standards, as there was in Gears; and consequently, the case has no relevance to the applicant’s.

Finally, HQ USAF/JAG recommends that the applicant’s appeal be denied as untimely.  The applicant admits disputing the Air Force’s recoupment action since 1994 and also admits that the Air Force notified her of its final recoupment action on 23 Feb 99.

The complete evaluation is at Exhibit K.

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APPLICANT”S REVIEW OF THIRD ADDITIONAL AIR FORCE EVALUATION:

Applicant’s counsel responded to the third additional Air Force evaluation in a 7-page brief of counsel with two exhibits.  Counsel states that HQ USAF/JAG failed to point out specific situations described in Undersecretary XXXXXXX letter that would not be considered voluntary refusal to serve or misconduct:

	  a.  Academic failure not deemed willful on the part of the individual.

	  b.  Failure to meet physical standards.

	  c.  Hardship.

Counsel asks several rhetorical questions.  If academic failure was not intended to trigger reimbursement, how could diabetes mellitus contracted during residency after serving in the Air Force Reserve for six years?  If failure to meet physical standards does not include medical disqualification, what does it include?  If hardship can result in exclusion for reimbursement, an illness resulting in the Air Force’s determination of medical disqualification must be considered a hardship.

Counsel discusses AF/JAG’s assertion that the intent of Undersecretary XXXXX’ letter was to entitle the government to recover the cost of education based on a concept of “fair return on investment.”  AF/JAG further suggests that “equity and good conscience and fairness to both parties” should be considered.  Counsel opines that it cannot reasonably be concluded that anything in Undersecretary XXXXXX’ letter suggests any other circumstance authorizing reimbursement than failing to serve on active duty “voluntarily or because of misconduct.”  Counsel points to examples of “voluntary or misconduct” given by Undersecretary XXXXXXXXXX.

Counsel states that it cannot be clearer that the legislation was enacted to enable the United States to obtain reimbursement of education costs only if the person “voluntarily or because of misconduct” does not serve for the specified period.  Without the authority of law to include a provision in the Health Professions Scholarship Contract (para 6(b)) that would result in a claim for reimbursement as a result of involuntary illness or disease, the provision must be considered unenforceable.

Counsel refers the Board to the applicant’s earlier statement of 6 Jan 03 (Exhibit J) in reference to his argument that the applicant signed her contract more than two and one-half years before the inclusion in 10 USC 2005(a)(3) of the reference to subsection (4).  Subsection 4 of 10 USC 2005 could not be considered as authority to include provisions such as 6(b) in the contract because:

	  a.  It would completely negate the limitations on the right to reimbursement provided in subsection (3) if the Secretary could include “any other reason deemed necessary” including involuntary reasons such as illness or disability.  Such an interpretation would suggest that subsection (3) is to be ignored.  The Secretary could include anything and everything he wanted in the contract to trigger a claim for reimbursement.

	  b.  A more reasoned view of subsection (4) is that it authorizes “other terms and conditions” not inconsistent with subsection (3) not terms and conditions that ignore the congressionally mandated limitations of “voluntary” actions or “misconduct.”  Subsection (4) does not include any provisions regarding reimbursement, which are exclusively set forth in subsection (3).

The judge in the Gears case said, “The only statute directly addressing the matter of reimbursement is 10 USC 2005(a)(3).”  He further stated that “Congress did not define voluntary or misconduct” and found that failure to meet weight limitation standards of the US Naval Academy was neither “voluntary or misconduct” and denied reimbursement.  Counsel opines, “however it is interpreted, “voluntary” would not and could not be applicable to contracting diabetes mellitus, a completely involuntary occurrence.”  Counsel provides further comments on the court’s determination in the Gears’ case and indicates that applying the court’s interpretation of 10 USC 2005 in Gears to the facts of the applicant’s case would result in denial of the claim for reimbursement.

HQ USAF/JAG suggests the 1990 amendment to Section 2005(a)(3) to add “or fails to fulfill any term or condition prescribed pursuant to Clause (4),” affirmed the existing Air Force practice of including a paragraph such as 6(b) in the HPSP contract by codifying the Secretary’s authority to include such other contractual terms and conditions triggering reimbursement.  The authority so construed could not include retroactive application to a contract signed in February 1988.  To do so would violate the very suggestion by HQ USAF/JAG to “consider the equities, good conscience, and fairness to both parties.”

Counsel discusses why the case Favreau v. United States cited by HQ USAF/JAG does not support the position of the Air Force in this case.  That case involved a class action brought by service personnel terminated for obesity or failure to meet physical fitness standards.  The government argued that the question of whether an individual failed to complete a term of enlistment “voluntarily” depended on whether the conduct was “within the control of the service member.”  A key finding by the court relevant to the applicant’s case was that the service members did not have a medical problem preventing weight loss.  If they did, the conduct would not be “voluntary” and this reimbursement would be denied, “if there were medical reasons for failure.”

Counsel addresses several other points raised by HQ USAF/JAG.  In reference to paragraph 11 of the HPSP contract, counsel states that the applicant was not disqualified for any reason under paragraph 11.  Regarding speculation by HQ USAF/JAG that the Secretary would grant a waiver to someone that has “lost his or her sight or a limb” or “incurred a debilitating disease” and could not earn a “better living” suggests that the Secretary is arbitrary and inconsistent considering the applicant has diabetes mellitus and did not get a waiver.  It would also mean that she should not have been disqualified in the first place and would be serving as an ENT in the Air Force if it is assumed she can “work and earn a better living.”

Counsel rebuts HQ USAF/JAG’s assertion that the applicant was afforded all procedural due process rights.  Counsel indicates that this issue was thoroughly discussed in their initial submission.  He again references the provision in 10 USC 2005(g)(2) that required the applicant to be notified before she was discharged, not after as she was.

Finally, counsel discusses HQ USAF/JAG’s position that paragraph 6(b) of the HPSP contract controls regardless of the reason for disqualification, the comparison of the applicant’s case to another Air Force physician that developed diabetes, and the recommendation to deny the applicant’s case as untimely.

Counsel provides a summary of the Gears case and an affidavit from the applicant giving her reasons why she believes the action taken by the Air Force to disqualify her without hearing or notice of a reimbursement obligation was arbitrary, unfair and inequitable.

Counsel’s complete response, with attachments, is at Exhibit M.

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THE BOARD CONCLUDES THAT:

1.  The applicant has exhausted all remedies provided by existing law or regulations.

2.  The application was not timely filed; however, it is in the interest of justice to excuse the failure to timely file.

3.  Sufficient relevant evidence has been presented to demonstrate the existence of error or injustice.  Although the applicant clearly signed the HPSP contract, which states, in essence, in paragraph 6b, that should she become unable to commence the period of her active duty service commitment specified in the contract because of physical disqualification, she agreed to reimburse the United States Government for the cost of her education, a majority of the Board believes that this provision of the contract fails to comply with 10 USC 2005(a)(3), which limits reimbursement to instances where the individual fails to fulfill their commitment due to voluntary actions or due to misconduct.  The majority does not find that the applicant’s disqualifying illness fits either of these two categories.  The Board majority finds arguments made by applicant’s counsel persuasive that paragraph 6b of the HPSP contract does not comply with the designed intent of Section 2005 as contained in the legislative history.  As pointed out by applicant’s counsel, when Section 2005 was proposed, it was indicated in the proposal that it was not the intent of the legislation to include situations where an individual is discharged or their education is terminated because of academic failure not deemed willful on the part of the individual, or failure to meet physical standards or hardship.  AF/JAG points out in their evaluation that 10 USC 2005(a)(4) grants the SECAF the authority to prescribe other terms and conditions as the Secretary deems necessary to protect the interests of the United States.  He further opines that this subsection was purposely designed to grant the SECAF discretion because by their very nature statutes cannot predict or envision every possible factual permutation and application.  On the surface, this would appear reasonable; however, the majority of the Board notes again that the issue of recovery in situations where an individual does not meet physical standards was specifically addressed in the proposed intent as stated in the legislative history.  Although it appears that the HPSP contract the applicant signed made her aware that she would have to repay the cost of her education if she could not meet her required ADSC, the Board majority believes that enforcement of this provision would be counter to the intent of the statute as implemented.  Additionally, the majority of the Board notes that the applicant signed her contract over two and one-half years before the amendment that paragraph 6(b) is derived from.  Finally, the majority of the Board is not convinced that the applicant received due process by being notified of the recoupment action prior to her discharge as required by the applicable statute.  Therefore, a majority of the Board recommends that the applicant’s records be corrected as indicated below.

_________________________________________________________________

THE BOARD RECOMMENDS THAT:

The pertinent military records of the Department of the Air Force relating to APPLICANT, be corrected to show that at the time of her discharge from the Air Force, the Secretary of the Air Force found that under the particular circumstances of her case, her discharge for physical disqualification was not within the meaning of Title 10, United States Code, Section 2005, and that accordingly, no debt was established to reimburse the United States for funds expended on her education under the Armed Forces Health Professions Scholarship Program (AFHPSP).

_________________________________________________________________

The following members of the Board considered this application in Executive Session on 4 February 2003 and 7 August 2003, under the provisions of AFI 36-2603:

	Panel Chair
	Member
	Member

By majority vote, the Board voted to correct the records, as recommended.  Mr.   voted to deny and has attached a minority report at Exhibit N.  The following documentary evidence was considered:

    Exhibit A.  DD Form 149, dated 15 May 02, w/atchs.
    Exhibit B.  Applicant's Master Personnel Records.
    Exhibit C.  Memorandum, AFPC/DPMAF2, dated 3 Jul 02.
    Exhibit D.  Letter, SAF/MRBR, dated 9 Jul 02.
    Exhibit E.  Letter, Applicant’s Counsel, dated 23 Oct 02,
                w/attachments.
    Exhibit F.  Memorandum, SAF/MI, dated 12 Oct 00.
    Exhibit G.  Letter, AFBCMR, dated 25 Jul 02.
    Exhibit H.  Memorandum, HQ USAF/JAG, dated 3 Dec 02.
    Exhibit I.  Letter, AFBCMR, dated 6 Dec 02.
    Exhibit J.  Letter, Applicant’s Counsel, dated 6 Jan 03.
    Exhibit K.  Memorandum, HQ USAF/JAG, dated 19 Mar 03.
    Exhibit L.  Letter, AFBCMR, dated 24 Mar 03.
    Exhibit M.  Letter, Applicant’s Counsel, dated 10 Jun 03,
                w/attachments.
    Exhibit N.  Minority Report, dated 2 Sep 03.

                                   
                                   Panel Chair

MEMORANDUM FOR THE EXECUTIVE DIRECTOR, AIR FORCE BOARD
                                          FOR CORRECTION OF MILITARY RECORDS (AFBCMR)

SUBJECT:  AFBCMR Application of XXXXXXXXXX, XXX-XX-XXXX

	    In Executive Session on 4 February and 7 August 2003, we considered the applicant’s requests for termination of recoupment of funds expended for her education through the Armed Forces Health Professions Scholarship Program and the return of her tax refunds held for payment toward this debt.  A majority of the Board voted to grant the applicant relief.  I disagree with their recommendation.

	    Applicant, through her counsel, has put forth several reasons why she should not be required to reimburse the Government for the cost of her education.  Among these are that her medical condition was not severe enough to preclude her serving on active duty, that required procedures were not followed in that she was not notified prior to her discharge that she would be required to repay her education costs, that she was advised by Air Force officials that she had no further obligation to the Air Force after her discharge, and, finally, that the contract that she signed does not comply with 10 USC 2005.

	    After reviewing both the applicant’s position as well as the Air Force’s, I accept the Air Force’s position as put forth by the legal opinions prepared by HQ USAF/JAG.  I do not find any error or injustice regarding the Air Force’s determination that the applicant was medically unfit to serve.  Applicant’s assertion that she was not notified that the Air Force intended to seek recoupment in the “Notice of Proposed Discharge,” is without merit.  A fair reading of 10 USC 2005, in light of its legislative history, application in prior cases and when read in tandem with the Health Professions Scholarship Program contract, clearly put applicant on notice of an obligation to repay.  I also find the applicant’s assertion that she relied on statements allegedly made by representatives of the Air Force informing her that she would not have any obligation to the Air Force unless she voluntarily failed to enter active duty to be unreasonable.  The oral hearsay statements allegedly made by applicant’s recruiter and the Deferred Physician Program manager should not be afforded any consideration, especially when one considers the specific language detailing applicant’s obligation in the contract she voluntarily entered into and memorialized by her signature.

	    I do find the arguments put forth by applicant’s counsel that the provision in the HPSP contract requiring repayment of medical education costs in cases of physical disqualification to not be specifically supported by law to have some weight.  The gravity of this argument, however, disappears when it is balanced against the express terms of the contract, which put applicant on notice of the circumstances that might subject applicant to the possibility of having to repay education costs.  To find in favor of the applicant, applicant’s counsel asks that we narrowly read 10 USC 2005 in a light most favorable to the applicant and, at the same time, completely ignore the existence of the HPSP contract.

	    Although she is not able to fulfill her obligation to the Air Force through no fault of her own, she continues to reap the benefits of the education that the Air Force has provided.  In view of the foregoing, I believe that to totally absolve her from all responsibility in this case would be contrary to established law and constitute an injustice to the Air Force.

					
									Panel Member