Page images
PDF
EPUB

unnecessary to decide what the effect would have been if the contractor had delivered 2,000 or even 1,000 units on or before December 29, 1960. We do not consider the exchange of correspondence concerning the test wire as encouraging the contractor to believe that its default had been "waived" or as evidencing any intention by the Government to forego its right to terminate.

Evidence has been furnished us to the effect that the contracting officer's representative urged Seaview on many occasions during December 1960 and early January 1961 to expedite delivery of the several small initial shipments which were made after November 29, 1960. We believe this evidence has a very material bearing on the question whether the Government led Seaview to believe its default had been "waived." However, none of this evidence was presented to the Board of Contract Appeals. In the light of the decision of the Supreme Court in United States v. Carlo Bianchi, 37 U.S. 709, decided June 3, 1963, we believe our review of the Board's decision must be limited to the record before the Board.

On the basis of that record, we are unable to conclude that the Board's decision was arbitrary, capricious, or not supported by substantial evidence. Seaview's claim is therefore denied.

[B-151080]

Pay-Retired - Disability-Re-Retirement-Election Requirement-General Rule

The holding with respect to Seliga type retired pay benefits under section 411 of the Career Compensation Act of 1949, 37 U.S.C. 281 (1952 Ed.), to retired Fleet Reservists in the Forster and Ellis cases decided by the Court of Claims on November 7, 1962 (Aflague, et al. v. United States, Ct. Cl. No. 212-56; Cobb, et al. v. United States, Ct. Cl. No. 430-56, and Wilson v. United States, Ct. Cl. No. 465-59), under which disability retired pay was barred to those members who could not show a timely and valid election of option (A) to qualify for disability retired pay under section 411 or could not establish that the failure to make an election was due to erroneous or misleading information by the Navy will be followed in future claims but prior Seliga type payments will not be recovered, also, since the holding left undisturbed retired pay computed under method (b) of section 511, 37 U.S.C. 311(b), even though not supported by an election of option (B) under section 411, the acceptance of the payments will be considered a ratification of the option (B) and the payments will not be disturbed.

Pay-Retired - Disability ment-Evidence

Re-Retirement Election Require

For retired Fleet Reservists to qualify for disability retired pay (Seliga type benefits) under section 411 of the Career Compensation Act of 1949, the evidence that the member exercised a proper election of option (A) or that he was misled by the Navy so as not to elect must be clearly shown from all the facts and circumstances presented in each case and in the absence of evidence clearly establishing entitlement the retired pay claims should be forwarded to the Claims Division, General Accounting Office, for action.

Pay-Retired - Disability -Re-Retirement-Election Requirement-Application

A retired Navy enlisted man who was certified for disability retired pay (Seliga type benefits) for the period February 4, 1953 to July 31, 1962, on the basis of a certification issued after November 7, 1962, the date of the Court of Claims decision in the Forster and Ellis cases (Ct. Cl. No. 212-56 and Ct. Cl. No. 430-56) barring disability retired pay when the record does not contain evidence of an election to qualify under option (A) of section 411 of the Career Compensation Act of 1949, or that the failure of the member to make an election was due to erroneous or misleading information by the Navy is not required to refund the payments but for the period after July 31, 1962, the member's pay should be continued on the same basis on which his retired pay was computed before the certification for Seliga type benefits.

Pay-Retired - Disability - Re-Retirement-Election Requirement-Application

A retired Navy enlisted member who had less than 30 years' creditable service on the date he was placed on the retired list in 1944 and who was certified for Seliga type benefits on the basis of an opinion of the Bureau of Medicine and Surgery that his disability was incurred while he was receiving basic pay, even though the record does not show an election of option (A) under section 411 of the Career Compensation Act of 1949, comes under the restrictions barring disability retired pay to members who did not make option (A) elections is not required to refund the payments for the period certified, but for the period following the certification the member should have his retired pay computed on the same basis it was computed since October 1, 1949-the date of the Career Compensation Act of 1949.

Pay-Retired - Disability -Re-Retirement-Election Requirement-Application

A retired Fleet Reservist who was certified for Seliga type retired pay benefits for the period November 5, 1952, to August 31, 1961, on the basis of a correction of records in April 1962 changing the character of his retirement from years of service to physical disability retroactively to July 1, 1945, may not be regarded as in a section 411 status for disability retired pay, and, therefore, while the disability retired pay received under the certification does not have to be refunded, retired pay for the period following the certification (September 1, 1961) should be computed at the rate being paid prior to the certification action.

Pay-Retired - Disability Re-Retirement ment-Application

[blocks in formation]

A Navy enlisted member who was advised by the Navy Department in 1951 that he was not entitled to benefits of section 411 of the Career Compensation Act of 1949 although he had been retired in 1941 for disability and then served on active duty from 1942 to 1945 when he was released with a disability rating of "zero" is regarded as having been misinformed as to his section 411 status and the certification of October 19, 1962, allowing the member Seliga type benefits for the period July 1, 1952, to July 31, 1962, is proper under the Forster and Ellis cases.

To Commander M. M. Alexander, Department of the Navy, July 1, 1963:

Reference is made to letter from your office "XO:HA:bjm" of February 6, 1963, addressed to our Claims Division requesting clarification of the action taken in certifying Seliga type benefits in the following cases

[blocks in formation]

It will be observed that, with the exception of Hawley, the settlements were issued prior to November 7, 1962, the date that the Court of Claims rendered decision in the cases of Paul F. Forster (Plaintiff No. 13, in Aflague, et al. v. United States, Ct. Cl. No. 212-56), George C. Ellis (Plaintiff No. 2, in Cobb, et al. v. United States, Ct. Cl. No. 430-56), and Frank Briggs Wilson v. United States, Ct, Cl. No. 465-59.

The principles underlying the Court of Claims decision rendered on November 7, 1962, in the Forster, Ellis and Wilson cases are that enlisted members of the naval service who (a) were initially placed on the retired list of the Navy from the Fleet Reserve by reason of 30 years' service, (b) thereafter were recalled to active duty, (c) incurred a physical disability while serving on such active duty under circumstances which would have qualified them to receive disability retired pay under Title IV of the Career Compensation Act of 1949, Ch. 681, 63 Stat. 816-825, 37 U.S.C. 271-285 (1952 Ed.), and (d) were released from such active duty prior to October 1, 1949, by reason of physical disability were

(1) "re-retired" by reason of physical disability and being in receipt of disability retired pay on October 1, 1949, were therefore within the scope and purview of section 411 of the 1949 law, 63 Stat. 823, 37 U.S.C. 281 (1952 Ed.), and

(2) in order to gain the increased retired pay benefits which flow from the rule in the Seliga case, decided March 6, 1957, 137 Ct. Cl. 710, it must be established that such individuals made a timely and valid election of option (A) under section 411, 37 U.S.C. 281 (A) (1952 Ed.), or that the Department of the Navy affirmatively gave them misinformation, by commission or omission, which induced or compelled them to make a decision less favorable than that to which they were entitled under the laws applicable in each individual case.

As a general rule it may be stated that section 411 members are not entitled to Title IV disability retirement pay (and the corresponding benefits of the Seliga rule) unless they (1) are qualified therefor (disability incurred while in receipt of basic pay, etc.) and (2) made a valid and timely election of option (A) in section 411. Also, section 411 members did not become entitled effective April 1, 1955, to the retired pay benefits of the Fagan (Gover) case (149 Ct. Cl. 716) (method (b) in section 511, 37 U.S.C. 311(b)) unless they had previously made a timely and valid election of option (B) in section 411, 37 U.S.C. 281 (B) (1952 Ed.). In the absence of any election under section 411 the member continued entitled automatically under section 519, 37 U.S.C. 318 (1952 Ed.), to receive the retired pay to

which he was entitled on September 30, 1949, with subsequent percentage increases therein as provided by law.

In the decision of Novemer 7, 1962, the court emphasized the fact that the record before it did not show that Forster or Ellis or the Department of the Navy had taken any action whatsoever with respect to the election of options provisions of section 411 of the 1949 law. The court, denying their claims for Seliga benefits on the basis that they had not made a timely and valid election of option (A) under section 411 in effect also held that they had not established any action or misinformation on the part of the Navy which had induced or compelled them to make an erroneous decision not to make an election, although the Department of the Navy had placed Forster and Ellis in a section 511 status by paying them method (b) section 511 retired pay effective from October 1, 1949.

The holding in the Forster and Ellis cases which has now become final thus bars, in the circumstances therein outlined, any Seliga benefits under Title IV of the 1949 law but leaves undisturbed, notwithstanding the absence of an option (B) election under section 411, the method (b), section 511 status. That holding henceforth will be followed by this Office in all like cases. While Seliga type settlements previously certified by this Office and any prior similar payments which have been made by the Department of the Navy will not be disturbed, the Forster and Ellis rule precludes the payment of any further claims for Seliga benefits unless the record clearly establishes a timely and valid election of option (A) under section 411 or misleading or erroneous information on the part of the Navy which induced or compelled a decision by the enlisted member less favorable than one he was entitled to make under the law.

Forster, Ellis and Wilson (plaintiffs in the decision of November 7, 1962) and many others in like circumstances were paid retired pay effective from October 1, 1949, computed under method (b) of section 511 of the 1949 law, 63 Stat. 829. It appears that the Department of the Navy made such payments on the basis that, since the individuals involved were not considered to be within the purview of section 411, their retired pay status was deemed to be within the scope of section 511. The holding in the decision of November 7, 1962, that Forster, Ellis and Wilson were in fact within the scope of section 411 did not question the legality of the method (b) section 511 payments made in such cases. The acceptance of those payments by the enlisted man. concerned, while not expressly supported by a timely and valid election of option (B) under section 411-an issue which was not considered by the court-may, in the circumstances thus presented, be

treated as a ratification of the option (B), section 411 election made for them by the Navy. See B-149388, September 4, 1962, copy enclosed. Accordingly, past and continuing payments of method (b) section 511 retired pay which have been made in such cases by this Office or by the Department of the Navy will not be disturbed.

On the question of what evidence may be considered as establishing an election under section 411, the conclusion reached by the Court of Claims in the Wilson case, i.e., that Wilson's requests for an evaluation of his physical disability under section 411 and the Navy's response that his case did not come under that section constitutes an clection, is so uncertain that it may not be used as a precedent in other similar cases. The holding in the Wilson case in that respect will not be followed in other similar cases, as to which there will be applied the general rule that whether an individual exercised a proper section 411 election, or was misled so as to not elect at all, will be for determination from all the facts and circumstances presented in each particular case. In the absence of evidence clearly establishing entitlement thereto, it would appear advisable that all pending and future claims for Seliga or Fagan (Gover) type benefits be forwarded to our Claims Division for direct action here.

The retired pay status of Earl C. Hawley, Claims file No. Z-1357818, GAO certification dated November 29, 1962, falls squarely within the scope of the Forster and Ellis cases. The action taken in the certification of November 29, 1962, allowing him Seliga benefits for the period February 4, 1953, to July 31, 1962, inclusive, will not be disturbed. No proper basis is presented, however, to allow him Seliga benefits for any period subsequent to July 31, 1962. Effective August 1, 1962, Hawley's retired pay account should be continued on the same basis on which his retired pay was computed by the Department of the Navy prior to the action taken in the certification of November 29, 1962.

Frank T. Jones, Claims file No. 2525970, GAO certification dated March 14, 1962, had less than 30 years' service when placed on the retired list February 1, 1944, and so it is clear that the Navy considered him as having been retired for physical disability. However, he was not evaluated and no opportunity to make a section 411 election appears to have been extended to him, apparently because the Navy then felt that his physical disability had not been incurred while in receipt of basic pay and hence that he was not entitled to the benefits of section 411. Although the Navy considered him as having been retired for physical disability, he was placed effective October 1, 1949, in method (b) of section 511 without the required election of option (B) under section 411, thereby treating him as in a nondisability section 511 status.

« PreviousContinue »