MEMORANDUM OF CONSIDERATION


         IN THE CASE OF:
        


         BOARD DATE: 16 May 2002
         DOCKET NUMBER: AR2002071141

         I certify that hereinafter is recorded the record of consideration of the Army Board for Correction of Military Records in the case of the above-named individual.

Mr. Carl W. S. Chun		Director
Mr. Joseph A. Adriance		Analyst

The following members, a quorum, were present:

Mr. Fred N. Eichorn		Chairperson
Mr. Roger Able		Member
Ms. Paula Mokulis		Member

         The Board, established pursuant to authority contained in 10 U.S.C. 1552, convened at the call of the Chairperson on the above date. In accordance with Army Regulation 15-185, the application and the available military records pertinent to the corrective action requested were reviewed to determine whether to authorize a formal hearing, recommend that the records be corrected without a formal hearing, or to deny the application without a formal hearing if it is determined that insufficient relevant evidence has been presented to demonstrate the existence of probable material error or injustice.

         The applicant requests correction of military records as stated in the application to the Board and as restated herein.

         The Board considered the following evidence:

         Exhibit A - Application for correction of military
records
         Exhibit B - Military Personnel Records (including
         advisory opinion, if any)

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APPLICANT REQUESTS: In effect, remission of his $640.91 debt to the government.

APPLICANT STATES: In effect, some time after his discharge, he was originally notified, by the Defense Finance and Accounting Service (DFAS), that there was an alleged overpayment in his terminal pay. He claims that he notified DFAS officials that he did not receive that alleged overpayment and DFAS admitted that over 90 percent of the debt amount they claimed was not owed by him. As a result of this revelation, he insisted that DFAS prove to him that he owed the $640.91 balance they alleged he still owed. Instead being provided confirmation of the debt, he was informed by DFAS officials that he had to prove the debt was not owed, which he claims violates due process and good conscience. He further comments that at no point did DFAS officials deny that any portion of the debt was the result of an error on the part of the government. In spite of this, and given he can not prove that something does not exist, he offered to settle the alleged debt by assigning the government a judgment, but DFAS refused this option. He also requested a waiver of the debt, which DFAS also refused to consider. In support of his application, he provides debt letters from DFAS and W-2 forms.

EVIDENCE OF RECORD: The applicant's military records show:

On 2 March 1989, he entered active duty in the Regular Army and he served for
3 years, 4 months, and 27 days until 28 July 1992, at which time he was honorably separated, by reason of physical disability with severance pay.

The separation document (DD Form 214) issued to the applicant on the date of his separation confirms that he was separated under the provisions of paragraph 4-24b(3), Army Regulation 635-40, by reason of physical disability with severance pay. This document also verifies that at the time of his discharge, he held the rank and pay grade of private first class/E-3.

The applicant’s Official Military Personnel File (OMPF) contains no financial documents related to the pay and allowances he received at the time of his discharge.

A DFAS letter, dated 17 August 1993, provided by the applicant, indicates that his pay record was reviewed at DFAS and no evidence of fraud was found. It explained that, in order to be held accountable for fraud, the government would have had to intentionally withheld entitlements or demanded recoupment in known violation his earned entitlements.

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The August 1993 DFAS letter further indicated that the indebtedness explained to the applicant in July 1993, was correct and that his account showed that he was overpaid $640.91 in a check sent to his bank account at Fort Hood, Texas, in March 1992. It was also explained that if his bank account was not credited with this amount, he should contact the bank because there was no record of the check being returned to DFAS. Finally, it stated that since the debt was determined to be valid, collection action would continue.

On 22 May 1995, DFAS officials responded to an April 1995 letter from the applicant, pertaining to his indebtedness. The applicant was informed that the DFAS Office of General Counsel had reviewed his request for a partial assignment of judgment as payment. However, the legal opinion provided, which cited established case law, indicated that the applicant was incorrect in asserting that the refusal to accept the assignment would discharge his obligation. The full faith and credit clause requires that the state judgment be recognized as valid, but does not require that the assignment of that judgment be accepted as payment for a debt. Finally, that the Missouri statute cited by the applicant was not binding on the United States.

On 13 September 1995, DFAS officials notified the applicant by letter that his account had been reviewed and showed that a payment totaling $535.21 was received. This payment was received from IRS Tax Refund Offset Monies and was posted on 22 March 1995. This letter further informed the applicant that his request for waiver had been denied and that the total amount due was $237.97, which included principal and interest and that DFAS would continue to collect the debt by offset of his tax refund until the debt was paid in full.

Army Regulation 37-104-4 (Military Pay and Allowances Policy and Procedures-Active Component) provides Department of the Army (DA) policies for entitlements and collections of pay and allowances for active duty soldiers. It is used in conjunction with Department of Defense Financial Management Regulation (DoDFMR), Volume 7, Part A (Vol 7A) DOD 7000.14-R. Paragraph 28-2 states, in pertinent part, that if the Secretary of Defense or any designee determines that a soldier is indebted to the U.S. Government as a result of an erroneous payment made to or on behalf of the soldier by an agency of the
U.S. Government, that debt may be collected.

Paragraph 32-3 contains time limitations for requesting waivers and it states, in pertinent part, that a claim of the United States against a soldier or former soldier, arising out of an erroneous payment of pay and allowances may be considered for waiver within 3 years from the date of discovery, when collection of the erroneous payment would be against equity and good conscience, and not in the best interest of the United States.

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Paragraph 32-4 contains guidance on the requirement for a notice of waiver rights. It states, in pertinent part, that this requirement applies only to U.S. claims for erroneous payments of pay and allowances, to or on behalf of a soldier or former soldier. The following standard notice of waiver rights will be used to stress that a waiver is not automatic when an erroneous payment results from administrative error: "This claim is subject to waiver under Public Law 92-453 if there is no evidence of fraud, misrepresentation, fault, or lack of good faith." However, the claim may not be waived merely because it resulted from administrative error. It further specifies that any significant unexplained increase in pay or allowances that would prompt an inquiry concerning the correctness of the payment ordinarily would preclude a waiver when the employee or soldier fails to bring the matter to the attention of the appropriate officials. No one is entitled to unearned compensation, and only in very unusual circumstances would equity and good conscience suggest that an individual should keep an overpayment. Before a claim can be waived, the facts must clearly establish that collection would not serve the best interests of the United States.

Paragraph 32-11 contains guidance on appeal procedures and it states that a denial of a waiver may be appealed if a material mistake of law or fact in the original ruling can be shown; or if appealing the validity of the debt, the amount, or the liability for it. The applicant must sign the appeal and send it to the Director, DFAS.

DISCUSSION: Considering all the evidence, allegations, and information presented by the applicant, together with the evidence of record, applicable law and regulations, it is concluded:

1. The Board notes the applicant’s request for remission of his debt to the government and considered his assertion that DFAS failed to establish the legitimacy of the debt, and that the collection process has denied him due process and is inequitable. However, the Board finds insufficient evidence to support these claims.

2. By law and regulation, if a determination is made that a soldier or former soldier is indebted to the U.S. Government as a result of an erroneous payment, the amount of the debt may be collected. Further, the applicable laws and regulations stipulate that no one is entitled to unearned compensation, and only in very unusual circumstances would equity and good conscience suggest that an individual should keep an overpayment.

3. Although incomplete, the available evidence establishes that a check for the amount of the debt or overpayment in question was forwarded to the applicant’s Fort Hood bank account by DFAS. The applicant has failed to directly address whether or not this check was deposited in his bank account, or if not, to provide evidence from his bank that the deposit was never made.
4. In the opinion of the Board, it is reasonable to conclude that if the check containing the overpayment in question was not deposited in the applicant’s bank account, he would have simply provided a statement from the bank confirming the money was not deposited in his account and resolved this debt issue. Thus, the Board finds that the applicant’s debt to the government was clearly established by DFAS and was and is valid.

5. The law does allow for a waiver of debt even if there is no evidence of fraud, misrepresentation, fault, or lack of good faith. However, it also stipulates that no one is entitled to unearned compensation, and only in very unusual circumstances would equity and good conscience suggest that an individual should keep an overpayment.

6. In the opinion of the Board, the facts of this case provide no evidence of a mistake in law in the original DFAS ruling denying the applicant’s appeal of this debt or any unusual circumstances that suggests that a waiver should be granted on an equity and good conscience basis. In view of the facts of this case, the Board concludes there is no propriety or equity basis for remitting the applicant’s debt to the government, or any portion thereof.

DETERMINATION: The applicant has failed to submit sufficient relevant evidence to demonstrate the existence of probable error or injustice.

BOARD VOTE:

________ ________ ________ GRANT

________ ________ ________ GRANT FORMAL HEARING

__FNE___ __RA__ __PM____ DENY APPLICATION

                  Carl W. S. Chun
                  Director, Army Board for Correction
of Military Records

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INDEX

CASE ID	AR2002071141
SUFFIX
RECON
DATE BOARDED	2002/05/16
TYPE OF DISCHARGE	HD
DATE OF DISCHARGE	1992/07/28
DISCHARGE AUTHORITY	AR 635-40
DISCHARGE REASON	Physical Disability with severance pay.
BOARD DECISION	DENY
REVIEW AUTHORITY
ISSUES 1. 293	128.1000
2.
3.
4.
5.
6.