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B-182816 1 (1975-10-29)

handle is hein.gao/gaobadcts0001 and id is 1 raw text is: / THE COMPTROLLER GENERAL OD ISION OF THE UNITED STATES VASHINGTON, D.C. 20548 FILE: B-182816 DATE: CT 2 V7 MATTER OF: J. N. Hadley, reimbursement of legal fees by SBA. DIGEST: Where U.S. Attorney undertook defense of former SBA employee who was sued as result of actions committed while acting within the scope of his employment and during course of proceedings U.S. Attorney withdrew for administrative reasons, necessitating former employee's retaining the services of private counsel although Government's interest in defending employee continued throughout proceedings, we would not object to SBA's reimbursing former employee an amount for reasonable legal fees incurred. 28 U.S.C. 1§ 51C-519, 547, and 5 U.S.C. 9 3106 are not a bar in such circumstances since to hold otherwise would be contrary to the rule that cost of defending such cases should be borne by the Government. The Administrator of the Small Business Administration (SBA) requested our decision as to whether SBA has authority to reimburse a former employee (M.. J. N. Ladley) for legal fees incurred as a result of his obtaining the services of private counsel to defend him in a suit arising out of actions committed while acting within the scope of his employment. The record indicates that upon initiation of the action against Mr. Hadley by the service of process and complaint upon him, the SBA referred his case to the Department of Justice for legal representation. The Department referred the matter to the United States Attorney in Billings, Montana, with instructions that he represent Mr. Hadley's interest. The United States Attorney handling the matter made timely application to remove the cause from the State court in which it was filed to Federal court. Unfortunately, the removal application was ineffective since, through inadvertence, it had been filed in the name of the United States rather than in the name of the employee who was the party defendant. Because of this oversight, the case was not effectively removed. Also, no answer was filed in the State proceeding on behalf of the defendant, and the statutory time for appearance expired. A judg- ment by default was summarily entered in the State proceeding and the plaintiff promptly took steps to execute the judgment against Mr. Hadley's property encumbering all of his real property and seizing his bank account. The United States Attorney did move to set aside the default judgment in the State proceeding, but no answer or PUBLISHED DECISION 55 Comp. -en... K ( ( Ll

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