Before Michel, Bryson, and Gajarsa, Circuit Judges.
The opinion of the court was delivered by: Per Curiam.
Suzanne Hodge petitions for review of a final decision of the Merit Systems Protection Board (Board), Docket No. CH-831E-98-0016-I-1, affirming the Office of Personnel Management's (OPM's) reconsideration decision to disallow her application for disability retirement benefits on the grounds that the application was not timely filed and that Ms. Hodge was not entitled to a waiver of the time limitation for filing an application. For the reasons set forth below, we vacate the decision of the Board and remand the case for consideration of whether Ms. Hodge is entitled to a waiver of the one-year time limitation based on the definition of "mentally incompetent" as understood by OPM.
Ms. Hodge was employed by the Department of the Army as a contract specialist. On July 19, 1985, Ms. Hodge resigned from federal service. In June 1996, eleven years after her resignation, Ms. Hodge wrote to the OPM notifying them of her intent to apply for disability retirement benefits. In her letter, Ms. Hodge stated that she had resigned due to health problems which, at the time, could not be identified, but had since been diagnosed as Chronic Fatigue Immune Dysfunction Syndrome. She further stated that she continued to suffer from the illness and had not known of the existence of disability benefits until recently. In its letter of July 30, 1996, OPM informed Ms. Hodge that any application she filed would be untimely. The letter also informed Ms. Hodge that the one-year statutory time limit could be waived only in certain cases involving mental incompetence. In that letter Ms. Hodge was told by OPM that mental incompetency is understood to mean "that an individual is or was unable to handle his personal affairs because of either physical or mental disease, or injury."
On September 16, 1996, Ms. Hodge submitted an application for disability retirement benefits. In a letter dated September 24, 1996, Ms. Hodge informed OPM that she was submitting medical records to establish that she was mentally and physically incompetent within one year after her resignation because of manic depression/bi-polar illness and continuing Chronic Fatigue Syndrome.
OPM dismissed her application as untimely because it was not filed prior to separation or within one year thereafter. See 5 U.S.C. § 8337(b) (1994). Ms. Hodge requested reconsideration of the initial decision. In its reconsideration decision, OPM again denied Ms. Hodge's application as untimely filed. OPM also found that Ms. Hodge had not shown that she was incompetent in the year immediately following her separation from government service.
Ms. Hodge appealed OPM's reconsideration decision to the Board where she argued that she was incompetent during the relevant time period and that OPM mischaracterized some of the evidence she submitted. In an initial decision, the Administrative Judge (AJ) affirmed OPM's decision, finding that Ms. Hodge had not established by a preponderance of the evidence that OPM should have waived the statutory filing deadline because she was mentally incompetent within one year of her separation from federal service. The AJ acknowledged affidavits filed by Mr. Gardner Hodge, Ms. Hodge's husband, and Ms. Nancy K. Angsten, a friend of Ms. Hodge, stating that Ms. Hodge was unable to perform domestic chores around the house and that Mr. Hodge managed Ms. Hodge's daily affairs. However, the AJ specifically noted a letter from Dr. James Templin, one of Ms. Hodge's treating physicians from October 1984 to August 1987. In his letter, Dr. Templin stated that, although Ms. Hodge suffered from a "physical and mental condition that substantially impacted her ability to clearly and precisely evaluate situations on a daily basis," he did not believe she was incompetent at any time while she was under his care. Dr. Templin did not indicate what standard or definition of "mentally incompetent" he had used in evaluating Ms. Hodge's case or whether Ms. Hodge had provided him with the definition as provided by OPM.
Ms. Hodge then petitioned the Board for review of the AJ's initial decision. The Board denied the petition for failure to meet the criteria for review set forth in 5 C.F.R. § 1201.115 (1997). Accordingly, the AJ's initial decision became the final decision of the Board. See 5 C.F.R. § 1201.113(b) (1997). Ms. Hodge filed a timely appeal with this court.
This court affirms a decision by the Board unless it is (1) arbitrary, capricious, an abuse of discretion or otherwise outside the law; (2) obtained without procedures required by law, rule, or regulation having been followed; or (3) unsupported by substantial evidence. See 5 U.S.C. § 7703(c) (1996); see Cheeseman v. Office of Personnel Management, 791 F.2d 138, 140 (Fed. Cir. 1986).
The AJ found that 5 U.S.C. § 8337(b), a subsection of the statute governing disability retirement for civil service employees, bars Ms. Hodge's claim for recovery. The statute provides:
"A claim may be allowed under this section only if the application is filed with the Office [of Personnel Management] before the employee or Member is separated from the service or within 1 year thereafter. This time limitation may be waived by the Office for an employee or Member who at the date of separation from service or within 1 year thereafter is mentally incompetent, if the application is filed with the Office within 1 year from the date of restoration of the employee or Member to competency or the appointment of a fiduciary, whichever is earlier."
On appeal, Ms. Hodge argues that the Board erred in finding that she failed to proved that she was mentally incompetent during the relevant time period. Specifically, Ms. Hodge argues that the AJ may have applied an incorrect definition of "mental incompetence" for the purpose of filing disability retirement benefits in reviewing her case. In his initial decision the AJ stated that although "appellant argues 'mental incompetence' means an individual is unable to manage their affairs because of either a mental or physical disease or injury, she cites no support for this proposition, and I know of none in either the controlling statute or the Board's jurisprudence." This definition, however, is one which OPM provided to Ms. Hodge; Ms. Hodge was explicitly given this definition of mental incompetence in a letter from the ...