Logan B. Prestonback v. United States

United States Court of Appeals
for the Federal Circuit
______________________

LOGAN B. PRESTONBACK,
Plaintiff-Appellant

v.

UNITED STATES,
Defendant-Appellee
______________________

2019-1166
______________________

Appeal from the United States Court of Federal Claims
in No. 1:17-cv-00439-LAS, Senior Judge Loren A. Smith.
______________________

Decided: July 20, 2020
______________________

PETER CHARLES ROMBOLD, Hoover Law Firm, Junction
City, KS, argued for plaintiff-appellant.

DANIEL S. HERZFELD, Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellee. Also repre-
sented by ETHAN P. DAVIS, ROBERT EDWARD KIRSCHMAN,
JR., DOUGLAS K. MICKLE.
______________________

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PRESTONBACK v. UNITED STATES
2
Before NEWMAN, REYNA, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
Logan B. Prestonback appeals the decision of the
United States Court of Federal Claims upholding the Army
Board for Correction of Military Records’ denial of his re-
quest for waiver of the recoupment of his educational assis-
tance debt by the United States Defense Finance and
Accounting Service. Guided by this court’s precedential de-
cision in Favreau v. United States, 317 F.3d 1346 (Fed. Cir.
2002), we affirm the Court of Federal Claims’ entry of judg-
ment on the administrative record in favor of the Govern-
ment.
B
ACKGROUND
I
In 2005, Mr. Prestonback was appointed as a cadet to
the United States Military Academy (USMA) in West
Point, New York. As a part of his commission, Mr. Pres-
tonback signed a service agreement, USMA Form 5-50,
wherein he agreed that “if [he] voluntarily fail[s], or be-
cause of misconduct fail[s], to complete the period of active
duty . . . [he] will reimburse the United States” the propor-
tional amount of his educational scholarship. J.A. 1056.
Form 5-50 further specifies that “[t]he term ‘voluntarily
fail’ includes, but is not limited to, failure to complete the
period of active duty because of conscientious objection, be-
cause of resignation from the United States Military Acad-
emy or United States Army, and marriage while a cadet.”
Id. (emphasis added).
Form 5-50 derived from 10 U.S.C. § 2005 (2000), which
allowed the Secretary to “require, as a condition to the Sec-
retary providing advanced education assistance to any per-
son, that such person enter into a written agreement with
the Secretary.” At the time Mr. Prestonback signed
Form 5-50, § 2005 similarly required reimbursement if the
person who entered into the written agreement
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PRESTONBACK v. UNITED STATES 3
“voluntarily or because of misconduct, fail[ed] to complete
the period of active duty.”
1
Id.
After graduating from West Point, Mr. Prestonback
was commissioned as a Second Lieutenant on May 23,
2009—triggering the start of his active duty service obliga-
tion—and began his service in Fort Riley, Kansas. While
there, he received a positive Officer Evaluation Report
(OER) for the period between December 17, 2009 and
July 20, 2010. Mr. Prestonback was then deployed to Iraq
on November 4, 2010, where he was quickly promoted to
First Lieutenant.
For the period between July 21, 2010 and May 9, 2011,
Mr. Prestonback received his first negative OER, stating
that he repeatedly “failed to follow direct lawful orders,”
“lack[ed] initiative,” “failed to properly account for his pla-
toon’s property,” and that he had “received no fewer than
six written and multiple verbal counseling sessions di-
rected to improve his performance.” J.A. 1045–46.
Mr. Prestonback acknowledged that these statements were
correct in his response to the OER. For the period between
May 18, 2011 and February 7, 2012, Mr. Prestonback re-
ceived his second negative OER, this time stating that he
“consistently under-performed.” J.A. 1041–42. In another
response, Mr. Prestonback acknowledged that his initial
performance was inadequate but indicated his belief that
his performance had improved. For the period between
February 8, 2012 and February 7, 2013, Mr. Prestonback
received his third negative OER, this time noting Mr. Pres-
tonback’s repeated failure of physical fitness tests and his
failure to meet the Army’s height and weight standards.

1
Effective January 6, 2006, § 2005 was amended to
exclude the “voluntarily or because of misconduct, fails to”
language.
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PRESTONBACK v. UNITED STATES
4
On December 14, 2012, the Army Resources Command
initiated Mr. Prestonback’s elimination from the Army
based on his first two negative OERs. Mr. Prestonback
contended that his negative OERs were based on the of-
ficer’s opinion of him rather than his performance, and that
he was given more senior responsibilities without the cor-
responding promotions when he was underqualified to han-
dle those responsibilities. On May 22, 2013, the Deputy
Assistant Secretary of the Army determined that Mr. Pres-
tonback should be involuntarily eliminated from the Army
for substandard performance, and that a recoupment ac-
tion for the proportional amount of his educational schol-
arship would be conducted. On June 27, 2013, the Army
discharged Mr. Prestonback.
On September 13, 2013, the United States Defense Fi-
nance and Accounting Service (DFAS) notified Mr. Pres-
tonback that he owed $30,352.01 in recoupment, an
amount proportional to the uncompleted time remaining
on his service agreement. On October 21, 2013, Mr. Pres-
tonback filed an Application for Correction of Military Rec-
ord with the Army Board for Correction of Military
Records, arguing that the recoupment action was improper
because he was eliminated involuntarily, and Form 5-50
only requires recoupment for voluntary action or miscon-
duct. On February 5, 2015, the Board denied Mr. Preston-
back’s application for correction, reasoning that “[h]e
breached his contract agreement by being eliminated for
substandard performance,” and so his “breach was consid-
ered voluntary.” J.A. 1003, 1008.
II
Mr. Prestonback filed a complaint in the Court of Fed-
eral Claims pursuant to the Tucker Act, arguing that he
should not have to pay recoupment because his Form 5-50
agreement with the Government was governed by contract
principles, and he neither voluntarily resigned nor was he
terminated for misconduct.
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PRESTONBACK v. UNITED STATES 5
The Court of Federal Claims granted the Government’s
motion for judgment on the administrative record. The
court held “that the Board reasonably concluded that
[Mr. Prestonback’s] involuntary termination for substand-
ard performance fell within the terms of Form 5-50” be-
cause his “referred OERs could reasonably be interpreted
as a voluntary failure to fulfill the terms of his service re-
quirement in violation of Form 5-50, which in turn trig-
gered an involuntary separation ripe for recoupment
actions.” Prestonback v. United States, 139 Fed. Cl. 380,
385 (2018). The trial court reasoned that “[p]recedent dic-
tates that agreements memorialized by documents such as
Form 5-50, which entitle service members to compensa-
tion, rest upon a statutory right, and therefore should not
be analyzed according to common law contract principles.”
Id. at 384. The trial court rejected Mr. Prestonback’s argu-
ment that “financial recoupment was proper only in the
event of his willful resignation or engagement of miscon-
duct.” Id. Citing this court’s decision in Favreau, 317 F.3d
at 1360, the trial court reasoned that “‘voluntarily failed’
can extend to actions other than a soldier’s willful resigna-
tion from the military.” Prestonback, 139 Fed. Cl. at 384.
It further explained that because Form 5-50 states that
“the term ‘voluntarily fail’ includes, but is not limited to”
certain actions, the listed actions are not exhaustive and
include substandard performance resulting in involuntary
separation. Id. at 384–85 (emphasis added).
Mr. Prestonback appeals to this court. We have juris-
diction pursuant to 28 U.S.C. § 1295(a)(3).
D
ISCUSSION
Mr. Prestonback raises two issues on appeal:
(1) whether the Form 5-50 agreement rests on a statutory
right or presents a question of government contracts; and
(2) whether the Court of Federal Claims erred in conclud-
ing that Mr. Prestonback’s substandard performance re-
sulting in an involuntary separation constituted a
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PRESTONBACK v. UNITED STATES
6
voluntary failure as set forth in 10 U.S.C. § 2005. Because
we agree with the trial court’s interpretation of § 2005, we
affirm its decision entering judgment on the administrative
record.
I
We find this case similar to Favreau, 317 F.3d 1346. In
Favreau, former members of the armed services brought a
class action suit against the United States for recouping
previously dispersed bonus payments after their separa-
tion from the Army. Id. at 1348. Mr. Favreau, in particu-
lar, “was separated from the Army for failure to comply
with weight control standards,” after which the “Army re-
couped the unearned portion of his reenlistment bonus.”
Id. at 1349. None of the Favreau plaintiffs were voluntarily
separated from the Army. Id. at 1350.
During the relevant timeframe, two provisions of the
U.S. Code governed recoupment of bonus payments—
37 U.S.C. §§ 308(d)(1) (1994) and 308a(b) (1994).
2
Fa-
vreau, 317 F.3d at 1351. These sections stated, in perti-
nent part, that “[a] member who voluntarily, or because of
his misconduct, does not complete the term of enlistment
for which a bonus was paid to him under this sec-
tion . . . shall refund that percentage of the bonus,”
§ 308(d)(1) (1994), and that “a person who voluntarily, or
because of his misconduct, does not complete the term of
enlistment for which a bonus was paid to him under this
section . . . shall refund that percentage of the bonus,”
§ 308a(b) (1994). This statutory language is strikingly sim-
ilar to the provision at issue in this case.

2
Effective October 1, 2000, 37 U.S.C. § 308a was re-
pealed by amendments made to subsection (b) of 37 U.S.C.
§ 309, and, effective January 6, 2006, 37 U.S.C. § 308(d)(1)
was rewritten into 37 U.S.C. § 308(d), which removed the
“voluntary, or because of his misconduct” language.
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PRESTONBACK v. UNITED STATES 7
Defending its recoupment action, the Government in
Favreau provided an affidavit that provided the Depart-
ment of Defense’s interpretation of the term “voluntarily.”
317 F.3d at 1352. The Department of Defense explained
that the question of “whether an individual has failed to
complete a term of enlistment ‘voluntarily’ depends on
whether the service-member was separated for engaging in
conduct that is within the control of the service-member
but incompatible with military service.” Id. Continuing, it
noted that recoupment is not limited “to separations
granted at the request of the service-member; rather, even
where the military service initiates the separation, we have
concluded that recoupment is appropriate if the conduct
that resulted in the separation was voluntary, i.e., within
the service-member’s control.” Id.
DFAS also promulgated recoupment regulations that
provided a list of actions that constituted failing to com-
plete one’s service term “voluntarily or because of miscon-
duct.” Id. at 1354. That list did not include the category
“weight control failure.” See id. at 1354–55. The regula-
tions did, however, include in the preamble the non-limit-
ing language “but is not limited to” and further included
non-limiting examples such as “[t]ransfer to Fleet Reserve,
Fleet Marine Corps Reserve, or the Army or Air Force Re-
serve,” “[m]arriage—female member,” “[r]esignation-sepa-
ration by reason of acceptance of member’s resignation,”
and “for the convenience of the government.” I d.
Mr. Favreau first claimed that the recoupment violated
his re-enlistment contract, which stated that he would be
“[e]ntitled to receive pay, allowances, and other benefits as
provided by law and regulation.” Id. at 1356. This court
rejected his contract claim, reasoning that the “duty to pay
the servicemen their bonuses is not contractual.” Id. Ra-
ther, we explained that it “is well-established that ‘a sol-
dier’s entitlement to pay is dependent upon statutory
right.’” Id. at 1357 (quoting Bell v. United States, 366 U.S.
393, 401 (1961)).
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PRESTONBACK v. UNITED STATES
8
Mr. Favreau next alleged that the recoupment of his
bonus violated provisions of 37 U.S.C. §§ 308(d)(1) and
308a(b). Id. Particularly, Mr. Favreau argued that he did
not “voluntarily” separate from the Army because he did
not apply for separation. Id. Citing a dictionary definition
of “voluntary,” Mr. Favreau urged that it required his sep-
aration to be “in a voluntary manner, of one’s own free
will.” Id. (quoting W
EBSTER’S NEW TWENTIETH CENTURY
DICTIONARY (UNABRIDGED), at 2049 (2d ed. 1979)). This
court, however, asked the question: “Is what voluntary?”
Id. Indeed, it was undisputed that the administrative act
of separation was not voluntary. Id. Rather, we explained
that because the term “separated” was not used in the gov-
erning recoupment statute, the question was whether the
non-completion of the term of service was voluntary. Id.
Particularly, we determined that the term “voluntary”
modifies the term “complete the term of enlistment.” Id.
We elaborated that the actor in the case of a separation is
the agency, while the actor in the case of non-completion of
the term of service is the service member. Id. We nonethe-
less concluded that the statutory language was ambiguous
because it does “not make it clear whether only those who
request separation voluntarily come to the end of their en-
listment.” Id. at 1358. We held, however, that the Depart-
ment of Defense’s interpretation of “voluntarily, or because
of his misconduct, does not complete the term of enlist-
ment” to include the failure to satisfy weight and fitness
standards was entitled to substantial deference. Id. at
1358–61.
II
With this background in mind, we first consider
Mr. Prestonback’s challenge to the Board’s treatment of
this case as one governed by statutory principles, rather
than government contracts law. We review a decision of
the Court of Federal Claims granting or denying a motion
for judgment on the administrative record de novo, apply-
ing the same standard of review as the trial court. Palantir
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PRESTONBACK v. UNITED STATES 9
USG, Inc. v. United States, 904 F.3d 980, 989 (Fed. Cir.
2018) (citing Glenn Def. Marine (Asia), PTE Ltd. v. United
States, 720 F.3d 901, 907 (Fed. Cir. 2013)). Accordingly, we
will not disturb the decision of the Board unless it is arbi-
trary, capricious, contrary to law, or unsupported by sub-
stantial evidence. Chambers v. United States, 417 F.3d
1218, 1227 (Fed. Cir. 2005) (citing Haselrig v. United
States, 333 F.3d 1354, 1355 (Fed. Cir. 2003)).
The Court of Federal Claims appropriately determined
that Mr. Prestonback’s agreement with the Army, memori-
alized through Form 5-50, rests upon a statutory right. As
this court has previously recognized, the Supreme Court
has ruled that military pay and benefit entitlements are
controlled by statute, not contract. Schism v. United
States, 316 F.3d 1259, 1271 (Fed. Cir. 2002) (en banc) (cit-
ing Bell, 366 U.S. at 401). “It is well-established that ‘a
soldier’s entitlement to pay is dependent upon statutory
right.’” Favreau, 317 F.3d at 1357 (quoting Bell, 366 U.S.
at 401). As in Favreau, where we determined that the
“duty to pay the servicemen their bonuses is not contrac-
tual,” id. at 1356, here, the duty to provide tuition assis-
tance is not contractual. The fact that there exists a
contract regarding entitlement to pay, allowances, and
other benefits “does not transform it into a duty which, if
violated, gives rise to contractual damages.” Id. (citing
United States v. Larionoff, 431 U.S. 864, 869 (1977)).
Moreover, Form 5-50 derived from a statute that allowed
the Secretary to “require, as a condition to the Secretary
providing advanced education assistance to any person,
that such person enter into a written agreement with the
Secretary.” 10 U.S.C. § 2005(a) (2000). Because tuition as-
sistance is encapsulated by military pay and benefit enti-
tlements, the Board properly treated Mr. Prestonback’s
case as one governed by statutory principles.
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PRESTONBACK v. UNITED STATES
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III
We next consider Mr. Prestonback’s contention that he
did not “voluntarily fail[]” to complete his full term because
an “involuntary elimination is not a voluntary elimina-
tion.” Appellant’s Br. 15–16. Once again, we find Favreau
instructive. The statute at issue here uses ambiguous lan-
guage nearly mirroring the statutory provisions at issue in
Favreau. Compare 10 U.S.C. § 2005(a)(3) (2000) (“[T]hat if
such person, voluntarily or because of misconduct, fails to
complete the period of active duty . . . such person will re-
imburse”), with 37 U.S.C. § 308a(b) (1994) (“a person who
voluntarily, or because of his misconduct, does not com-
plete the term of enlistment . . . shall refund”). Indeed,
Mr. Prestonback’s counsel conceded at oral argument that
the statutory language at issue in this case and in Favreau
is nearly identical. See Oral Arg. at 10:54–11:05,
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=19-
1166.mp3. And the Favreau court even cited to § 2005, rec-
ognizing the similarity between it and the statutory provi-
sion at issue in Favreau. See 317 F.3d at 1360 n.22.
Moreover, as was the case in Favreau, Form 5-50 de-
fines the term “voluntarily” to include but not be limited to
certain actions, such as conscientious objection, resigna-
tion, and marrying while a cadet. Compare J.A. 1056, with
Favreau, 317 F.3d at 1354–55. Also as it did in Favreau,
the Government interpreted “voluntarily . . . fail[s]” to en-
compass volitional actions of a service member, such as
substandard performance. J.A. 1008. This interpretation,
like the Government’s interpretation of the statute at issue
in Favreau, is “within the range of reasonable interpreta-
tions of ambiguous code provisions.” Favreau, 317 F.3d.
at 1361. It is reasonable to conclude that a voluntary fail-
ure to complete active duty service as an officer (or a term
of enlistment as in Favreau) can broadly refer to a service
member’s voluntary actions triggering the service mem-
ber’s separation. Thus, as in Favreau, the Government’s
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PRESTONBACK v. UNITED STATES 11
reasonable interpretation of the recoupment statute should
be afforded deference.
3

Mr. Prestonback asserts that “his involuntary termina-
tion from the Army was logically the opposite of a voluntary
termination, and that therefore recoupment was not au-
thorized by his contract.” Appellant’s Br. 13. He continues
that because the plain meaning of the term “voluntary” is
clear, his elimination cannot be both voluntary and invol-
untary. Id. at 15–16. Yet, as we explained in Favreau, the
question is not whether the administrative act of Mr. Pres-
tonback’s elimination from the Army was voluntary. See
317 F.3d at 1357. Rather, the question is whether his fail-
ure to complete the period of active duty was voluntary.
See id. Accordingly, much as we determined that Mr. Fa-
vreau voluntarily did not complete his term of enlistment
for failing to meet physical standards, id. at 1349, 1357, we
conclude that Mr. Prestonback voluntarily failed to com-
plete his period of active duty for substandard perfor-
mance.
The Army’s treatment of “conscientious objection”—
listed in Form 5-50 as an example of voluntary failure by
the service member—as grounds for an involuntary elimi-
nation in certain circumstances supports our view that a
voluntary failure to serve should not be limited to a volun-
tary elimination. At least as of December 2009, a cadet
who applies for discharge on the grounds of conscientious
objection “will be permitted to resign or will be involuntar-
ily separated from the Military Academy” where that ca-
det’s application for discharge “is disapproved or the cadet
is reclassified.” United States Military Academy, Army

3
Here, the level of deference we afford to the Gov-
ernment is Skidmore deference, which is afforded to less
formal expressions of agency interpretation. Skidmore
v. Swift & Co., 323 U.S. 134, 140 (1944); see also United
States v. Mead Corp., 533 U.S. 218, 227–28 (2001).
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PRESTONBACK v. UNITED STATES
12
Regulation 210-26, ¶ 6-21 (2009). This interpretation fur-
ther demonstrates the juxtaposition between a voluntary
failure to complete the period of active duty and the admin-
istrative act of involuntary elimination.
For these reasons, we conclude that the Court of Fed-
eral Claims correctly concluded that Mr. Prestonback vol-
untarily failed to fulfill the terms of his service
requirement.
C
ONCLUSION
We have considered Mr. Prestonback’s remaining ar-
guments, but we do not find them persuasive. For the fore-
going reasons, we affirm the decision of the Court of
Federal Claims entering judgment on the administrative
record.
AFFIRMED
C
OSTS
No costs.
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