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.