Teresa K. Day v. Office of Personnel Management
Background
- In 2009 OPM approved Teresa K. Day for FERS disability retirement; she originally elected OWCP compensation in lieu of FERS annuity.
- In March and August 2015 Day asked OPM to convert her election back to FERS; she filed an MSPB appeal alleging constructive denial after OPM failed to acknowledge her requests.
- The parties reached an oral settlement at hearing: Day’s FERS election would be effective January 1, 2016; OPM was to take action to begin the FERS benefit as of that date; any OWCP payments after that date would be overpayments.
- The administrative judge adopted the settlement and dismissed the appeal as settled; the decision became final.
- Day filed a petition for enforcement, alleging OPM materially breached by not starting the previously determined monthly annuity ($1,740), placing her on interim pay, and requesting additional paperwork.
- The administrative judge denied enforcement, finding the settlement did not specify an annuity amount or preclude OPM from using its administrative processes (interim pay, requesting information) to finalize the annuity calculation; the Board affirmed on review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether OPM materially breached the settlement by failing to begin $1,740 monthly annuity immediately | Day: settlement required OPM to initiate the previously determined $1,740 annuity without further calculation | OPM: settlement did not identify an amount; it could complete its administrative process to finalize calculation | Held: No breach. Settlement silent as to amount; OPM may follow procedures to determine correct annuity |
| Whether the settlement prevented OPM from placing Day in interim pay status | Day: interim pay and paperwork requirement violate settlement | OPM: interim pay and requests for missing information are permissible steps to finalize benefits | Held: OPM may place Day on interim pay while finalizing annuity; this did not breach the agreement |
| Whether the settlement language was ambiguous, requiring extrinsic evidence | Day: ambiguous—she interprets it to require immediate payment of prior amount | OPM: unambiguous silence; parties are presumed to incorporate applicable statutes/regulations | Held: Agreement unambiguous; no extrinsic evidence necessary; terms permit OPM to apply law and administrative process |
Key Cases Cited
- Allen v. Department of Veterans Affairs, 112 M.S.P.R. 659 (Board 2009) (agency must show compliance or good cause; appellant bears burden to prove material breach)
- Sweet v. U.S. Postal Service, 89 M.S.P.R. 28 (2001) (settlement is a contract; interpret by contract principles)
- Landrith v. Office of Personnel Management, 99 M.S.P.R. 76 (2005) (silence in decree may be nondispositive rather than ambiguous)
- Young v. U.S. Postal Service, 113 M.S.P.R. 609 (2010) (parties are presumed to incorporate applicable statutes/regulations into agreements)