BNUMBER:  B-270502
DATE:  May 24, 1996
TITLE:  Elizabeth R. Haviland-Survivor Benefit Plan-Former Spouse
Annuity

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Matter of:Elizabeth R. Haviland-Survivor Benefit Plan-Former Spouse 
          Annuity

File:     B-270502

Date:May 24, 1996

DIGEST

In a property settlement incorporated into a divorce decree, a retired 
Air Force member agreed to maintain his former wife as beneficiary 
under the Survivor Benefit Plan (SBP).  He filed a former-spouse SBP 
election with the Air Force, indicating that it was made pursuant to 
court order, but the election did not include the required signature 
of the former spouse.  The Air Force accepted the election without 
notifying the member or former spouse of the discrepancy in the 
election.  The member remarried and later wrote to the Air Force 
requesting that his new wife be provided coverage under the SBP.  
Although an election made pursuant to court order may not be changed 
or revoked without an authorizing court order, the Air Force, without 
requesting clarification, established coverage for the second wife to 
whom it awarded the annuity upon the member's death.  In view of 
apparent administrative error, the Air Force should consider the 
matter for correction pursuant to 10 U.S.C.  sec.  1454.  If appropriate 
correction is made, payment to the former spouse may be made.

DECISION

This decision is in response to Mrs. Elizabeth R. Haviland's appeal of 
our Claims Group's denial of her claim for a Survivor Benefit Plan 
(SBP) annuity based on the service of her former husband, Colonel 
George P. Haviland, USAF (Retired) (Deceased).[1]  Mrs. Haviland's 
claim was denied because the SBP election Colonel Haviland submitted 
on her behalf lacked Mrs. Haviland's signature.  As explained below, 
it is our view that the Air Force should review the entire record in 
the case, including information submitted with Mrs. Haviland's appeal, 
to determine whether the invalid election resulted from administrative 
error.  If the Air Force finds that the invalidity resulted from 
administrative error, it may make the appropriate correction to 
validate the election pursuant to authority provided by 10 U.S.C.  sec.  
1454.

BACKGROUND

Elizabeth and George Haviland were married in 1945.  Colonel Haviland 
retired from the Air Force in 1973 and elected SBP coverage for 
Elizabeth as his spouse.  They were divorced in Monterey, California, 
on January 2, 1988.  As a part of the property settlement agreement 
they executed in October 1987 in anticipation of the divorce, 
Elizabeth was to receive one half of the community amount of Colonel 
Haviland's Air Force retired pay, and she was to continue to be 
maintained as the beneficiary under the SBP for which they agreed to 
jointly bear the cost.[2]  This property settlement agreement was 
incorporated into the divorce decree.

On January 16, 1988, Colonel Haviland married Marsue Haviland.  In 
December 1988, Colonel Haviland submitted the appropriate form to the 
Air Force Finance and Accounting Center to elect former spouse 
coverage for Elizabeth under the SBP.  This was necessary to carry out 
the requirement of the property settlement agreement since Elizabeth 
no longer qualified for SBP spouse coverage.  On the form Colonel 
Haviland submitted, he completed the provisions applicable to him, 
listed Elizabeth as his former spouse, and checked the block 
indicating that the election was being made pursuant to a court order.  
However, the space provided for the former spouse's signature was left 
blank.  The form was accepted by the Air Force and retained on file, 
apparently without any official notification to either Colonel 
Haviland or Elizabeth that the required signature of the former spouse 
had not been provided.

In May 1989, Colonel Haviland wrote to the finance center to elect SBP 
coverage for his current spouse, Marsue.  In doing so, he noted that 
he had enrolled in the SBP for his former spouse when he retired in 
1973, that he was later divorced from her and that he was remarried in 
January 1988 to Marsue.  He also stated that it was his understanding 
that Marsue "will have the same SBP as my ex-wife."  In reporting on 
the matter to our Claims Group, the Defense Finance and Accounting 
Service (DFAS) noted that from this statement by Colonel Haviland, it 
is unclear whether he believed that Marsue would have the same SBP 
benefits that Elizabeth would have had if she had remained his SBP 
beneficiary, or whether he believed that both Elizabeth and Marsue 
could be SBP beneficiaries.  In any event, DFAS reports that because 
of the incomplete application for former spouse coverage for 
Elizabeth, it appears that a determination was made that Marsue was 
the proper beneficiary, and she was established as the spouse 
beneficiary as of the first anniversary of their marriage, January 2, 
1989.  DFAS further stated that their records do not disclose any 
correspondence attempting to clarify the confusion as to Colonel 
Haviland's election desires.  While DFAS acknowledged that Colonel 
Haviland attempted to establish former spouse coverage for Elizabeth, 
they were uncertain that the election form he submitted is sufficient 
to establish her as the beneficiary since the statute provides that 
the election is to be signed by both the member and the former 
spouse.[3]  As is indicated above, based on this record, our Claims 
Group denied Elizabeth's claim for the annuity.

Elizabeth has appealed, arguing that it was clearly her former 
husband's intent to provide the annuity for her, and despite ample 
opportunity in personal telephone calls she made in 1988 and 1989 to 
the Finance Center, it was never mentioned to her that it was 
necessary for her to take action to secure the annuity.  In support of 
her position, she provided additional information.  Included are 
copies of correspondence from the attorney who represented her during 
the divorce proceedings.  Among other things, the attorney refers to 
correspondence dated September 15, 1988, he received from an attorney 
who represented Colonel Haviland stating that while Colonel Haviland 
then had no documentation on hand showing that Elizabeth was the 
designated SBP beneficiary, he provided assurance that Elizabeth was 
designated as beneficiary, that she had always been so-designated, and 
no changes had ever been made.  He further stated that these facts 
could be verified by calling the Air Force Finance Center at a 
telephone number he provided.  Also provided is a copy of a 
handwritten note from Colonel Haviland, stated to have been received 
in February 1988, assuring Elizabeth that her name was then carried as 
his SBP beneficiary on Air Force records.  In addition, Elizabeth's 
attorney provided a copy of a "Qualified Domestic Relations Order" 
dated October 7, 1988, entered by the Superior Court of California, 
County of Monterey, which Elizabeth's attorney says was served by 
certified mail on the Air Force.  This order states the agreed terms 
included in the settlement agreement concerning the division of 
Colonel Haviland's retired pay between him and Elizabeth during his 
lifetime, and Elizabeth's entitlement to all survivor benefits the 
cost of which was to be shared equally by the two parties.

ANALYSIS

The SBP, 10 U.S.C.  sec.  1447-1460b, was established by Congress as an 
income maintenance program for dependents of deceased members of the 
uniformed services, and it includes provisions whereby a member may 
elect coverage for a former spouse.  10 U.S.C.  sec.  1448(b)(3).  In 
recognition of the fact that coverage under the SBP could become an 
item of negotiation in a divorce settlement, it was concluded that a 
former spouse should be entitled to rely on a written agreement to 
provide such coverage.  See 66 Comp. Gen. 687, 691 (1987), and 
legislative history cited therein.  As a result, statutory provisions 
have been included to provide that, if a member elects to provide 
coverage for a former spouse, the member shall, at the time of making 
the election, provide the Secretary concerned with a written statement 
(signed by the member and the former spouse) setting forth (A) whether 
the election is being made pursuant to the requirements of a court 
order, or (B) whether the election is being made pursuant to a written 
agreement previously entered into voluntarily by the member as a part 
of or incident to a divorce, and if so, whether such agreement has 
been incorporated in, or ratified or approved by, a court order.  10 
U.S.C.  sec.  1448(b)(5).  If a member who is required by court order to 
make such an election, or who has entered into such an agreement which 
has been incorporated in, or ratified or approved by, a court order, 
then refuses or fails to make the election as agreed, the former 
spouse may make a request to the appropriate service Secretary within 
a year of the court order, and the service shall then "deem" an 
election to have been made by the member.  10 U.S.C.  sec.  1450(f)(3).  An 
election of former spouse coverage made pursuant to a court order or 
to an agreement incorporated in, ratified or approved by court order 
may not be changed unless the member provides a proper court order 
modifying any prior court orders so as to allow the change requested.  
10 U.S.C.  sec.  1450(f)(2).

In this case, as noted above, Elizabeth was covered under the SBP as 
Colonel Haviland's spouse beneficiary from the time he retired in 1973 
until such coverage ended with their divorce in January 1988.  Colonel 
Haviland agreed to provide SBP coverage for her in their property 
settlement, which was incorporated into the divorce decree, and he and 
his attorney assured Elizabeth and her attorney that she was his SBP 
beneficiary.  In October 1988, the Qualified Domestic Relations Order, 
in which Elizabeth was the petitioner, was entered and, according to 
her attorney, was served on the Air Force.  This order restated the 
terms of their agreement as to the division of Colonel Haviland's 
retired pay and Elizabeth's entitlement to be covered as his SBP 
beneficiary.  In December 1988 the Air Force received Colonel 
Haviland's election of former spouse coverage for Elizabeth which 
stated that the election was being made pursuant to court order, but 
as noted above, lacked Elizabeth's signature.  At this point, with the 
information it had received, if the Air Force considered the election 
of coverage insufficient, it appears that Colonel Haviland, and 
Elizabeth, should have been advised so that action could be taken to 
provide the necessary signature, or so that Elizabeth could file a 
request for a deemed election.  This was not done; the election form 
was apparently accepted and retained on file, and according to 
Elizabeth, she was never advised of the signature requirement in her 
telephone conversations with Air Force Finance Center personnel during 
this time period, but was advised that she was covered under the SBP.  
There appears to be no doubt that Elizabeth would have provided the 
signature since the coverage Colonel Haviland elected was what they 
had agreed to and what she thought she had.

Subsequently, in May 1989, Colonel Haviland sent the somewhat 
ambiguous letter to the Air Force seeking to elect SBP coverage for 
Marsue, which also apparently was accepted and filed by the Air Force.  
Why no inquiry was made to Colonel Haviland about this questionable 
election, in light of the earlier election made pursuant to court 
order, is unexplained.  In any event, it appears to us that since 
Colonel Haviland knew he was obligated under the divorce settlement 
adopted by court order to provide SBP coverage for Elizabeth (for 
which she apparently was sharing the cost), and for whom he had 
elected coverage just 6 months previously, when he sent the May 1989 
letter he was seeking to provide spouse coverage for Marsue in 
addition to (not in place of) the former spouse coverage provided for 
Elizabeth.  As noted above, the SBP makes no provision for providing 
such dual coverage, but apparently Colonel Haviland was not notified 
of this fact.

In view of these facts, it appears clear to us that Colonel Haviland 
intended to honor his obligation to provide SBP coverage for Elizabeth 
when he filed the election in December 1988, and that Elizabeth would 
have signed the form had it been presented to her.[4]  Their situation 
was exactly the type of situation Congress contemplated when it 
enacted the provisions discussed above authorizing elections of SBP 
coverage for former spouses pursuant to court orders or agreements 
incorporated in divorce decrees, and we understand that it is the 
services' view that the purpose of having the former spouse sign the 
election is to protect the service in cases where the election is made 
pursuant to court order but the member fails to so indicate on the 
form.  Presumably in such a case, the former spouse would note the 
discrepancy and take action to have it corrected so that the election 
could not later be changed without a court order authorizing the 
change.  That problem is not present in this case since Colonel 
Haviland indicated on the form that the election was made pursuant to 
a court order.

In our view, this case is appropriate for consideration under the 
authority provided the Secretary concerned by 10 U.S.C.  sec.  1454 to 
"correct or revoke any election" under the SBP "when he considers it 
necessary to correct an administrative error."  Compare B-174552, July 
10, 1972.[5]  If the Air Force finds that the discrepancy with the 
election of SBP coverage for Elizabeth was the result of 
administrative error and takes appropriate corrective action pursuant 
to section 1454, payment of the annuity to her may be made.[6]

/s/Lowell Dodge
forRobert P. Murphy
General Counsel

1. The Claims Group denied Mrs. Haviland's claim by settlement 
Z-2869622, June 8, 1995.

2. It is not entirely clear from the record as to how the SBP cost 
sharing was to take place, but it appears to have been by computing 
each party's share of Colonel Haviland's retired pay based on the 
amount of such pay after deduction of the SBP premiums.

3. DFAS also noted that the election was not witnessed as provided for 
on the form.  However, that is not a specific statutory requirement, 
and in this case there appears to be no doubt that the form was 
completed, signed and sent to the service by Colonel Haviland.  We 
also note that Colonel Haviland's handwritten letter requesting SBP 
coverage for Marsue was not witnessed but was given effect by the 
service.

4. We understand that in 1994, the services adopted a policy 
(previously followed by some services) to accept former spouse 
elections that have not been signed by the former spouse, and then 
attempt to notify the former spouse of the terms of the election.  If 
no response is received from the former spouse within a reasonable 
time, the former spouse is then notified that the terms of the 
election have become final.  While in the present case the Air Force 
accepted the form, it did not follow the notification provisions of 
the present policy which presumably would have led to a prompt 
resolution of the lack of Elizabeth's signature.

5. This decision applies 10 U.S.C.  sec.  1445, a similar provision 
applicable to the Retired Serviceman's Family Protection Plan, after 
which section 1454 was patterned.

6. A correction or revocation pursuant to 10 U.S.C.  sec.  1454, except 
when procured by fraud, is "final and conclusive on all officers of 
the United States."  Such a correction in favor of Elizabeth in this 
case would, in effect, render the payments received by Marsue 
erroneous.  However, the resulting debt would be subject to waiver 
under 10 U.S.C.  sec.  1453, and in such a case, we would concur in waiver 
of the debt.