U.S. Court of Appeals, Federal Circuit
March 05, 1999
MICHAEL L. NEWTON, PETITIONER,
DEPARTMENT OF THE ARMY, RESPONDENT.
Before Mayer, Chief Judge, Rich, and Plager, Circuit Judges.
The opinion of the court was delivered by: Per Curiam.
NOTE: Pursuant to Fed. Cir. R. 47.6, this Disposition is not citable as precedent. It is a public record. The Disposition will appear in tables published periodically.
Michael Newton appeals from a decision of the Merit Systems Protection Board (MSPB or Board), No. SE-0752-95-0213-C-2, denying his petition for enforcement of a settlement agreement between himself and the Department of the Army (Army). We affirm.
Based on an investigation and report by the Army's Criminal Investigations Division (CID), the Army removed Mr. Newton from his position as a Management Analyst in 1995, alleging that he submitted false claims for a living quarters allowance. He appealed his removal to the MSPB. Prior to the MSPB hearing, the parties entered into a settlement agreement. Under the agreement, Mr. Newton agreed to voluntarily resign, and the Army agreed to, inter alia, purge at least some of its files of references to the original allegations against Mr. Newton.
After resigning from the Army, Mr. Newton submitted a petition for enforcement to the MSPB, seeking to compel the Army to purge its records of references to his original removal and associated investigation in locations outside of Korea. The Army admitted that copies of the CID investigation report were at CID headquarters at Fort Belvoir, Virginia and the Army's Central Clearance Facility (CCF) at Fort Meade, Maryland, but argued that it had not agreed to purge documents at any location other than Korea. The disputed language concerning the Army's obligation to purge documents is in the following clause of the agreement (emphasis added):
The agency will purge from the records of management and from the Seoul Civilian Personnel Office and the Office of the Civilian Personnel Director, United States Forces Korea, all documents connected with Appellant's removal. Such documents shall include, but not be limited to, the CID investigation, notice of proposed removal, reply to proposed removal and decision to remove. Appellant shall be provided with a neutral reference which states only his dates of employment, positions held, rates of pay, and that he was performing at a satisfactory level at the time of his resignation. All inquiries from prospective employers shall be directed to the Seoul Civilian Personnel Office, and information disclosed shall be limited to the contents of the neutral reference referred to above. The Seoul Civilian Personnel Office shall maintain a copy of this agreement in the Appellant's personnel file for purposes of enforcement of this agreement. The terms of this agreement shall not be disclosed by the Seoul Civilian Personnel Office to prospective employers of the Appellant.
The MSPB administrative Judge agreed with the Army's interpretation of the clause, stating that:
The settlement agreement is specific as to what must be purged and the locations from which it must be purged. Although the term "records of management," standing alone, could be broadly construed to include all agency files, the addition of the phrase "and from the Seoul Civilian Personnel Office and the Office of the Civilian Personnel Director, United States Forces Korea" establishes that the range of facilities required to purge their records of the criminal investigation report and references to the removal was more limited. If "records of management" was intended to include all records of the agency, there would be no need to separately name the civilian personnel offices. Thus, I conclude that the term "records of management," as used in this settlement agreement, is limited to the records of the appellant's supervisory chain, rather than the Department of the Army as a whole.
The administrative Judge distinguished this case from King v. Department of the Navy, 130 F.3d 1031 (Fed. Cir. 1997), in which we interpreted a settlement agreement containing the phrase "remove all reference to the removal action from her Official Personnel File" as requiring the Navy to purge documents from files at the Office of Personnel Management and Defense Finance and Accounting Service. We stated that to construe the phrase otherwise would frustrate King's goal of obtaining a fresh start. The administrative Judge stated that to reach the same result as King would be to give Mr. Newton more than he bargained for. He was well aware that other agency components maintained records of his alleged fraudulent activity, and he could have sought inclusion of those other components in the settlement agreement, as he did with the civilian personnel facilities. While the Court (sic) in King found it highly unlikely that the parties bargained for purging of only local personnel records, that is precisely what was done here.
Mr. Newton appeals.
This court's general standard of review of decisions of the MSPB is limited. We affirm a Board decision unless it is: (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule or regulation having been followed; or (3) unsupported by substantial evidence. See Frederick v. Department of Justice, 73 F.3d 349, 351-52 (Fed. Cir. 1996) (quoting 5 U.S.C. § 7703(c) and noting that substantial evidence requirement is met if reasonable mind might accept evidence on record as adequate to support the Conclusion reached). The interpretation of a settlement agreement is a question of law. See King, 130 F.3d at 1033. We therefore review the administrative Judge's interpretation of the agreement without deference to the administrative Judge's decision. See id.
A settlement agreement is a contract, and thus contract interpretation rules guide our analysis. We stated the relevant rules in King:
"In interpreting a written agreement, we first ascertain whether the written understanding is clearly stated and was clearly understood by the parties. If ambiguity is found, or if ambiguity has arisen during performance of the agreement, the judicial role is to implement the intent of the parties at the time the agreement was made. In so doing the words used by the parties to express their agreement are given their ordinary meaning, unless it is established that the parties mutually intended and agreed to some alternative meaning. The paramount focus is the intention of the parties at the time of contracting; that intention controls in any subsequent dispute." Id.
As we discuss below, the relevant language in the settlement agreement is ambiguous. However, we conclude that the parties intended at the time of contracting that only records in Korea were to be purged, and therefore that Mr. Newton did not meet his burden of proving the Army's noncompliance with the terms of the agreement. See Perry v. Department of the Army, 992 F.2d 1575, 1577 (Fed. Cir. 1993) (citing 5 C.F.R. § 1201.182(a) and stating that the burden is on petitioner to show noncompliance).
The parties dispute the meaning of the phrase "purge from the records of management and from the Seoul Civilian Personnel Office and the Office of the Civilian Personnel Director, United States Forces Korea." There are at least two reasonable interpretations of this phrase. One is that purging is to apply to all Army management records, wherever located, and also to the Seoul, Korea-based Civilian Personnel Office and Office of the Civilian Personnel Director. Another reasonable interpretation is that purging is to apply to all records held by Army management, the Seoul Civilian Personnel Office and the Office of the Civilian Personnel Director located within the jurisdiction of United States Forces Korea, i.e., within Korea. We therefore conclude that this language is ambiguous and move to discerning the intent of the parties at the time of contracting.
The administrative Judge found that Mr. Newton was aware of the existence of records outside of Korea relating to his allegedly fraudulent activity before he entered the settlement agreement. On appeal, Mr. Newton states in his reply brief that "[w]hile subconsciously I may have known that files [outside of Korea] did exist, no one specifically stated what type of files or where the files were specifically located." Given this, we must conclude that substantial evidence supports the administrative Judge's finding.
The disputed clause in the settlement agreement states that "[a]ll inquiries from prospective employers shall be directed to the Seoul Civilian Personnel Office." Under the agreement, the Army was specifically obligated to purge that office of documents associated with Mr. Newton's removal. This clearly shows that Mr. Newton intended that prospective employers be directed to an office in Seoul that contained sanitized files. Taken in conjunction with Mr. Newton's awareness of files outside of Korea that referred to his removal, this indicates that at the time of entering the settlement agreement, the parties intended that only files in Korea that were controlled by Army management, the Seoul Civilian Personnel Office, and the Office of the Civilian Personnel Director were to be purged. We therefore conclude that the settlement agreement does not obligate the Army to purge records connected to Mr. Newton's removal that are not held by Army management under United States Forces Korea, the Seoul Civilian Personnel Director, and the Civilian Personnel Director, United States Forces Korea. *fn1
Because Mr. Newton did not allege that the Army was not in compliance with the settlement agreement concerning these areas, we conclude that Mr. Newton did not meet his burden of proving the Army's noncompliance with the terms of the agreement and the administrative Judge was correct in denying Mr. Newton's petition for enforcement.