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UNITED STATES v. VETTI

March 23, 1988

UNITED STATES OF AMERICA
v.
MANUEL W. VETTI.



The opinion of the court was delivered by: Dorsey, District Judge.

RULING ON MOTION FOR SUMMARY JUDGMENT

I. Facts and Procedural History*fn1

"On August 5, 1976, while an employee of the United States Postal Service, defendant filed a claim for benefits under the Federal Employees' Compensation Act (`FECA')," Statement, ¶ 1, for hypertension, cephalalgia,*fn2 sleeplessness, and high blood pressure, allegedly as a result of occupation related events.

Apparently, in the early 1970s, defendant, along with a number of associates, owned several parcels of property in Stamford, Connecticut, which were offered for sale to the Postal Service. Defendant's involvement with these properties and his potential conflict of interest prompted investigations by his superiors and the United States Attorney. A subsequent indictment resulted in defendant's eventual conviction in 1979 on a charge that he participated, as a government employee, in a decision or recommendation which he knew he had a financial interest, in violation of 18 U.S.C. § 208(a). See Employees' Compensation Appeals Board ("ECAB") Decision and Order (3/18/82).

After the OWCPL's decision, defendant was informed that he had been overpaid in the amount of $102,329.32. Id., ¶ 9. Defendant sought review of both the denial of his benefits and a review of the overpayment order. Id., ¶¶ 11-15. On March 18, 1982, the ECAB affirmed OWCP's decision denying defendant further benefits. Id., ¶¶ 16-17. "On August 9, 1984 an OWCP hearing representative ("HR") conducted a hearing on the issues of: a. overpayment; b. amount of overpayment; c. existence of absence of fault by defendant." Id., ¶ 22. The HR found that the correct amount of overpayment was $102,329.32 and that defendant was not without fault in causing the overpayment. See Decision of HR (1/25/85). Specifically, the HR found that defendant should have known that he was not entitled to benefits because his problems related to his "outside business association and his financial interest in certain parcels of property." Id. at 4. By representing that his medical problems were job related, defendant was found to have violated 5 U.S.C. § 8129(a).*fn3 "On July 23, 1985 OWCP moved the ECAB to remand for a further hearing as there had been an incorrect finding as to [defendant's] fault." Statement, ¶ 26. The motion was subsequently granted. Id., ¶ 28.

On remand, the HR issued a new decision on January 7, 1986, and found defendant without fault in creating the overpayment. Id., ¶¶ 30-32. However, waiver of the overpayment was denied. Although defendant was found to be without fault in causing the payments, the HR concluded that recovery would not defeat the purpose of the FECA and would not be against equity and good conscience. This conclusion was based on the HR's finding that defendant had sufficient assets to afford repayment.

Defendant appealed the HR decision on April 9, 1986. On March 31, 1987, the ECAB affirmed the HR's decision denying a waiver based on defendant's estimated asset worth of $584,833.78. See ECAB Decision and Order (3/31/87). Several demand letters have subsequently been sent to defendant requesting overpayment. No payment has yet been made.

On October 2, 1987, plaintiff instituted this action seeking recovery from defendant of the $102,329.32 in FECA overpayments made to him, plus interest to date of judgment. Defendant denies plaintiff's entitlement to repayment on the basis that the procedures "followed by the U.S. Department of Labor, Office of Workers' Compensation Programs in purporting to determine and assess the amount of alleged overpayment to defendant violated the due process rights guaranteed to the defendant by the Fifth Amendment to the U.S. Constitution." Defendant's Answer at 1. Plaintiff has moved for summary judgment. For the reasons set forth herein, the motion is denied in part and granted in part.

II. Discussion

A. Summary Judgment

  . . .Fed.R.Civ.P. 56(c) provides, in part, that
  summary judgment shall be rendered only when a
  review of the entire record demonstrates "that
  there is no genuine issue as to any material
  fact." The burden falls on the moving party to
  establish that no relevant facts are in dispute.
  Heyman v. Commerce & Indus. Ins. Co.,
  524 F.2d 1317, 1319-20 (2d Cir. 1975); accord Addickes v.
  S.H. Kress & Co., 398 U.S. 144, 157 [90 S.Ct. 1598,
  1608, 26 L.Ed.2d 142] (1970). Moreover, in
  determining whether a genuine issue has been
  raised, a court must resolve all ambiguities and
  draw all reasonable inferences against the moving
  party. United States v. Diebold, Inc.,
  369 U.S. 654, 655 [82 S.Ct. 993, 994, 8 L.Ed.2d 176] (1962)
  (per curiam); Quinn v. Syracuse Model Neighborhood
  Corp., 613 F.2d 438, 445 (2d Cir. 1980).
  Properly employed, summary judgment allows the
  court to dispose of meritless claims before
  becoming entrenched in a frivolous and costly
  trial. Knight v. U.S. Fire Ins. Co., 804 F.2d 9 (2d
  Cir. 1986), cert. denied, [___ U.S. ___], 107 S.Ct.
  1570 [94 L.Ed.2d 762) (1987). It must, however, be
  used selectively to avoid trial by affidavit. Judge
  v. Buffalo, 524 F.2d 1321 (2d Cir. 1975).
  Hence, the fundamental maxim remains that on a
  motion for summary judgment a court "cannot try
  issues of fact; it can only determine whether there
  are issues to be tried." Heyman, 524 F.2d at
  1319-20. As long as the plaintiff has adduced
  sufficient facts to ...

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