King v. Office of Personnel Management
2013 U.S. App. LEXIS 18966
| Fed. Cir. | 2013Background
- Don King had overlapping marital claims: he had a long relationship with Diana (common-law claimed) and later civilly married Kathryn; Don died in 2004 and both women claimed survivor annuity benefits.
- Kathryn received survivor annuity payments from OPM from May 2004 to Feb 2007 and later transferred most of those funds into a trust for Diana pursuant to settlement negotiations and a 2004 handwritten settlement agreement.
- Montana state litigation produced a 2008 decree finding Diana the lawful common-law wife and declaring Don’s marriage to Kathryn void; OPM then reallocated benefits to Diana and sought recovery of $41,939.13 from Kathryn as an overpayment.
- Kathryn argued she was without fault and that recovery should be waived because she detrimentally relied on the erroneous payments by transferring the funds to Diana and could not feasibly recover them.
- The MSPB denied waiver (majority view that settlements and litigation history did not make recovery unconscionable); the Federal Circuit reversed, finding substantial evidence Kathryn detrimentally relied on the overpayment and is entitled to waiver.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kathryn is entitled to waiver of OPM overpayment under "equity and good conscience" (detrimental reliance) | Kathryn transferred annuity payments to Diana in reliance on receiving them and cannot feasibly recover those funds; transfer was material and irrevocable, so waiver is warranted | OPM: Kathryn knew she might have to repay (was on notice); transfers were payments of preexisting settlement obligations, not caused by the overpayment; Kathryn can sue in state court to recover the funds | Court held Kathryn proved the four OPM-guideline elements (causation, detriment, materiality, irrevocability); waiver granted based on detrimental reliance |
| Whether Kathryn was "at fault" for the overpayment (precondition to waiver) | Kathryn contended she was not at fault because OPM paid during a period she reasonably believed she was the widow | OPM did not dispute timeline; argued settlement language showed Kathryn acknowledged non-entitlement | Court agreed Kathryn was without fault: OPM paid while marital status unresolved, so no fault for acceptance of payments |
Key Cases Cited
- Money v. Office of Pers. Mgmt., 811 F.2d 1474 (Fed. Cir.) (definition of "widow" under Civil Service Retirement Act)
- Crawford v. Dep’t of the Army, 718 F.3d 1361 (Fed. Cir.) (standard for substantial evidence review)
- Hernandez v. Office of Pers. Mgmt., 450 F.3d 1332 (Fed. Cir.) (standard of review for MSPB decisions)
- Hayes v. Department of the Navy, 727 F.2d 1535 (Fed. Cir.) (standard for reviewing Board decisions)