Citation Nr: 0839433 Decision Date: 11/17/08 Archive Date: 11/25/08 DOCKET NO. 07-33 572 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in No. Little Rock, Arkansas THE ISSUE Entitlement to accrued benefits other than for previously reimbursed burial expenses incurred on the veteran's behalf. REPRESENTATION Appellant represented by: Richard L. Slagle, Attorney at Law WITNESSES AT HEARING ON APPEAL Appellant and her daughter, S. K. ATTORNEY FOR THE BOARD Paul S. Rubin, Associate Counsel INTRODUCTION The veteran had active military service from February 1972 to February 1975. He died in December 2005. The appellant is the veteran's mother. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a January 2007 decision issued by the Department of Veterans Affairs (VA) Regional Office (RO) in No. Little Rock, Arkansas. The appellant and her daughter testified at a videoconference hearing in July 2008 before the undersigned Acting Veterans Law Judge of the Board. At the hearing, the appellant stated she was represented by an attorney, but that he was unable to attend the hearing. [The appellant elected to go forward with the hearing without her attorney.] Pursuant to 38 C.F.R. § 20.603(a), an attorney may be recognized by VA as a claimant's representative upon receipt of a properly executed VA Form 22a, Appointment of Attorney or Agent as Claimant's Representative. In the alternative, an attorney may be recognized upon receipt of a writing on the attorney's letterhead stating that he or she is authorized to represent the claimant, as long as there is a written confirmation from the claimant consenting to the representation. Here, in May 2006, the veteran's attorney submitted a letter to the VA indicating that he represented the appellant. In a previous February 2006 Report of Contact, the appellant indicated that she had turned over this matter to her attorney. This is, in essence, an equivalent of a grant of power of attorney, and the Board recognizes Richard L. Slagle as her attorney in this matter. FINDINGS OF FACT 1. In a November 2005 rating decision, the veteran was awarded service connection for a seizure disorder, rated as 100 percent disabling, effective back to June 4, 1981. As a result, the veteran was awarded retroactive payments totaling $490,063. 2. The veteran subsequently died on December [redacted], 2005. 3. In January and February of 2006, the VA issued his retroactive award totaling $490,063 in four separate checks. Either the appellant or the veteran's uncle deposited the checks into the veteran's bank account. 4. These improperly negotiated checks were returned to the VA by the bank. 5. The appellant (the deceased veteran's mother), is not the veteran's spouse, child, or dependent parent as defined in VA regulations for purposes of receiving accrued benefits. Although she is the duly appointed representative of the deceased veteran's estate, payment of accrued benefits to the estate of the deceased veteran is not authorized by law since the payments were issued after the veteran's death. CONCLUSION OF LAW The appellant is not a proper claimant for any accrued benefits due the deceased veteran; there is no legal basis for payment of accrued benefits. 38 U.S.C.A. §§ 5121, 5122 (West 2002 and Supp. 2008); 38 C.F.R. §§ 3.59(a), 3.250, 3.1000, 3.1003 (2008); Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Duties to Notify and Assist The Board observes that the Veterans Claims Assistance Act of 2000 (VCAA), 38 U.S.C.A. § 5100 et seq., eliminated the requirement for a well-grounded claim, enhanced VA's duty to assist a claimant in developing facts pertinent to his claim, and expanded VA's duty to notify the claimant and his representative, if any, concerning certain aspects of claim development. VA promulgated regulations that implement these statutory changes. See 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a). However, with regard to the accrued benefits issue currently on appeal, the provisions of the VCAA have no effect on an appeal where the law, and not the underlying facts or development of the facts, is dispositive of the matter. Manning v. Principi, 16 Vet. App. 534, 542-543 (2002). See also Smith v.Gober, 14 Vet. App. 227, 230 (2000), aff'd, 281 F.3d 1384 (Fed. Cir. 2002), cert. denied, 537 U.S. 821 (2002); Dela Cruz v. Principi, 15 Vet. App. 143 (2001); VAOGCPREC 5-2004 (June 23, 2004). That is, the U.S. Court of Appeals for Veterans Claims (Court) has held that the statutory and regulatory provisions pertaining to VA's duty to notify and to assist do not apply to a claim if resolution of that claim is based on statutory interpretation, rather than consideration of the factual evidence, as is the case here. Dela Cruz, 15 Vet. App. at 149 (2001). Therefore, the Board finds that no further action is necessary under the statutory and regulatory duties to notify and assist. Governing Laws and Regulations Benefits to which a beneficiary was entitled at his death, based on evidence on file at the date of death or under existing ratings or decisions, i.e., accrued benefits, will be paid to survivors as provided by law. 38 U.S.C.A. § 5121(a) (West 2002 and Supp. 2008); 38 C.F.R. § 3.1000(a) (2008). See also Pub. Law No. 108- 183, § 104, 117 Stat. 2651 (Dec. 16, 2003) (amending 38 U.S.C.A. § 5121(a) to repeal the two-year limit on accrued benefits for deaths occurring on or after the date of enactment). The implementing regulation for accrued benefits, 38 C.F.R. § 3.1000, also underwent similar amendments, effective January 29, 2007. See 71 Fed. Reg. 37027, 37029 (June 29, 2006) (proposed rule), and 71 Fed. Reg. 78368-69 (Dec. 29, 2006) (final rule). The proposed rule made it clear that if the beneficiary died on or after December 16, 2003, as is the case here since the veteran died in December 2005, the subsequent claim for accrued benefits will be adjudicated under the new version of 38 C.F.R. § 3.1000 (with no two-year limitation on accrued benefits and with other minor modifications). See 71 Fed. Reg. 37029 (June 29, 2006) (proposed rule). Applications for accrued benefits must be filed within one year after the date of death. 38 U.S.C.A. § 5121(c); 38 C.F.R. § 3.1000(c). Upon the death of a veteran beneficiary, accrued benefits are paid to the first living person in a list as follows: the veteran's spouse, the veteran's children (in equal shares), or the veteran's dependent parents (in equal shares) or surviving parent. 38 U.S.C.A. § 5121(a)(2); 38 C.F.R. § 3.1000(a)(1). In all other cases, accrued benefits may be paid only as necessary to reimburse the person who bore the expense of last sickness and burial. 38 U.S.C.A. § 5121(a)(5); 38 C.F.R. § 3.1000(a)(4). In short, in order to be eligible for accrued benefits, therefore, the claimant must qualify as a member of one of the statutorily enumerated categories of recipients. Burris v. Principi, 15 Vet. App. 348, 352-53 (2001). For VA purposes, the term "parent" means a natural mother or father (including the mother of an illegitimate child or the father of an illegitimate child if the usual family relationship existed), mother or father through adoption, or a person who for a period of not less than 1 year stood in the relationship of a parent to a veteran at any time before his or her entry into active service. 38 C.F.R. § 3.59(a). The term "dependent parent" is defined under 38 C.F.R. § 3.250 (2008). This regulation provides that conclusive dependency of a parent (other than one who is residing in a foreign country) will be held to exist where the monthly income does not exceed: (1) $400 for a mother or father not living together; (2) $660 for a mother and father, or remarried parent and spouse, living together; and (3) $185 for each additional "member of the family" as defined in paragraph (b)(2). See 38 C.F.R. § 3.250(a)(1). Where the income exceeds the monthly amounts stated in paragraph (a)(1) of 38 C.F.R. § 3.250, dependency will be determined on the facts in the individual case under the principles outlined in paragraph (b) of that section. Specifically, dependency will also be held to exist if the father or mother of the veteran does not have an income sufficient to provide reasonable maintenance for such father or mother and members of his or her family under legal age and for dependent adult members of the family if the dependency of such adult member results from mental or physical incapacity. 38 C.F.R. § 3.250(b). In such cases, dependency will not be held to exist if it is reasonable that some part of the corpus of the claimant's estate be consumed for his or her maintenance. 38 C.F.R. § 3.250(a)(2). The term "reasonable maintenance" includes not only housing, food, clothing, and medical care sufficient to sustain life, but such items beyond the bare necessities as well as other requirements reasonably necessary to provide those conveniences and comforts of living suitable to and consistent with the parents' reasonable mode of life. 38 C.F.R. § 3.250(b)(2). For purposes of entitlement to accrued benefits, the mother or father must be dependent within the meaning of 38 C.F.R. § 3.250 at the time of the veteran's death. 38 C.F.R. § 3.1000(d)(3). Accrued benefits are also discussed within 38 U.S.C.A. § 5122. This section provides that a check received by a payee in payment of accrued benefits shall, if the payee died on or after the last day of the period covered by the check, be returned to the issuing office and canceled, unless negotiated by the payee or the duly appointed representative of the payee's estate. The amount represented by such check, or any amount recovered by reason of improper negotiation of any such check, shall be payable in the manner provided in section 5121 of this title, without regard to section 5121(c) of this title. Any amount not paid in the manner provided in section 5121 of this title shall be paid to the estate of the deceased payee unless the estate will escheat. 38 U.S.C.A. § 5122 (West 2002) The accompanying regulation pertaining to section 5122 clarifies that where the payee of a check for benefits has died prior to negotiating the check, the check shall be returned and canceled. 38 C.F.R. § 3.1003 (2008). The amount represented by the returned check, less any payment for the month in which the payee died, shall be payable to the living person or persons in the order of precedence set forth for accrued benefits. 38 C.F.R. § 3.1003(a). Payments to persons who bore the payee's last expenses are limited to the amount necessary to reimburse those expenses. Id. There is no limit on the retroactive period for which payment of the amount represented by the check may be made, and no time limit for filing a claim to obtain the proceeds of the check or for furnishing evidence to perfect a claim. 38 C.F.R. § 3.1003(a)(1). Any amount not paid in this manner shall be paid to the estate of the deceased payee, provided that the estate will not revert to the state because there is no one eligible to inherit it. 38 C.F.R. § 3.1003(b). The Court has interpreted the requirement that the check be "received" by a payee, for purposes of applying 38 U.S.C.A. § 5122, as requiring actual receipt by the payee during the payee's lifetime, that is, that the benefit payment be at least delivered to or under the control of the payee prior to the payee's death, even if not negotiated, signed, or used by the payee during his or her lifetime. See Wilkes v. Principi, 16 Vet. App. 237, 242-243 (2002) (electronic transfer to deceased payee's account six days after payee's death did not constitute "receipt" by the payee for purposes of 38 U.S.C.A. § 5122). In essence, if the payment at issue was made to the payee after his or her death, the provisions of 38 U.S.C.A. § 5122 and 38 C.F.R. § 3.1003 are inapplicable; rather, the provisions of section 38 U.S.C.A. § 5121 govern as to an accrued benefits claim. Id. The threshold question in any claim for VA benefits is whether status as an eligible claimant has been established. See Hayes v. Brown, 7 Vet. App. 420 (1995). Factual Background In a November 2005 rating decision, the veteran was awarded service connection for a seizure disorder, rated as 100 percent disabling, effective back to June 4, 1981. As a result, the veteran was awarded retroactive payments totaling $490,063. The veteran subsequently died on December [redacted], 2005. In January and February of 2006, the VA then issued his retroactive award totaling $490,063 in four separate checks. Either the appellant or the veteran's uncle deposited the checks into the veteran's bank account. In February 2006, the veteran's bank put a hold on the checks upon being informed by Social Security of the veteran's death. The bank eventually returned the checks to the VA. In November 2006, the appellant (veteran's mother) filed a VA Form 21-601, Application for Accrued Amounts due a Deceased Beneficiary, for the retroactive award. The RO denied the claim by way of an initial decision dated in January 2007 and statement of the case (SOC) dated in August 2007. The appellant appealed the case to the Board. Analysis The appellant (veteran's mother) contends that she is entitled to the accrued retroactive payments totaling $490,063 due to her status as a dependent parent of the veteran. In the alternative, she argues that the veteran's estate should be awarded the money, to then be handled by the state probate court for disbursement by law. She reasons that the effective date of the award for these monies (June 4, 1981), was well before his death. Therefore the veteran was in fact entitled to this money prior to his death. The appellant's attorney adds that under Arkansas law, the appellant as the veteran's mother would be the sole heir of these monies if it was disbursed to the estate. At the time of his death, the veteran was divorced and had no children. See May 2006 attorney letter; October 2007 VA Form 9 (substantive appeal); and July 2008 videoconference hearing testimony. The appellants' attorney has submitted a February 2006 Letter of Administration disclosing that the appellant is in fact the administratrix of the veteran's estate. Initially, the appellant previously identified additional burial expenses totaling $1517.25 for the veteran's funeral. However, VA had already reimbursed her in full for these burial expenses incurred on the veteran's behalf, such that this issue is moot. See 38 C.F.R. § 3.1000(a)(5) (accrued benefits may be paid only as necessary to reimburse the person who bore the expense of last sickness and burial). Here, the claim for accrued benefits was timely filed in November 2006, within one year of the veteran's death. 38 U.S.C.A. § 5121(c); 38 C.F.R. § 3.1000(c). The key threshold issue here, however, is whether the veteran's mother is an individual to whom accrued benefits may be paid, that is, does she have standing to qualify as a "dependent parent." 38 U.S.C.A. § 5121(a)(2); 38 C.F.R. § 3.1000(a)(1)(iii). In this case, the Board finds that the appellant is not a proper claimant for the proceeds totaling $490,063. She simply does not fall within the class of individuals eligible to receive accrued benefits under 38 C.F.R. § 3.1000(a)(1). That is, she does not qualify as the veteran's spouse, child, or dependent parent. In this vein, the appellant has not provided any financial information of record following the veteran's death revealing the existence of her conclusive dependency as the veteran's parent under the guidelines set out in 38 C.F.R. § 3.250 (a). That is, there is no evidence that her monthly income was below $400. She has repeatedly asserted that during his lifetime she in fact supported the veteran as he could not take care of himself. See October 2007 VA Form 9 (substantive appeal) and July 2008 videoconference hearing testimony at pages 3-4. As to whether she qualifies as a "dependent parent" on the basis that she did not have income sufficient to provide reasonable maintenance for herself and her family, there is simply no evidence the veteran was financially supporting his mother. In fact, to the contrary, the appellant has asserted throughout the appeal that she was the "sole caretaker" of the veteran, he relied upon her for his livelihood, and they had to have a joint bank account to make sure his bills were paid. The appellant has not produced evidence to show that she required the veteran's financial support to provide for reasonable maintenance during his lifetime. Without the necessary financial evidence, there is no basis to establish the appellant as a dependent parent of the veteran at the time of his death, as defined in 38 C.F.R. § 3.250. The evidence of record simply does not show that the appellant meets any of the criteria listed under 38 C.F.R. § 3.1000(a) for payments as an individual. It follows that the appellant is not a proper claimant for the disbursement of proceeds from the returned benefit checks under VA law. See 38 C.F.R. § 3.1003(a). The Board turns to the issue of whether the appellant's status as the duly appointed representative of the deceased veteran's estate allows entitlement of the proceeds of the benefit checks to the estate pursuant to 38 U.S.C.A. § 5122 and 38 C.F.R. § 3.1003(b). According to the appellant's attorney, because the appellant as the veteran's mother qualifies as an heir under Arkansas law, the veteran's estate would not revert to the state, since at least one person would be eligible to inherit the proceeds from the estate. Id. In addition, as noted above, the appellants' attorney has submitted a February 2006 Letter of Administration disclosing that the appellant is in fact the administratrix (executor) of the deceased veteran's estate. Regardless, although the appellant (the veteran's mother) is the executor of the veteran's estate, the veteran died in December 2005, prior to his receiving the payments in January and February 2006, and, therefore, these payment cannot be part of the estate. Wilkes, 16 Vet. App. at 242-243 (2002). In essence, because the benefit payments were issued after the veteran's death, the provisions of 38 U.S.C.A. § 5122 and 38 C.F.R. § 3.1003(b) are inapplicable, and payment to the estate of the deceased veteran is not authorized. Id. In Wilkes, factually similar to the present case, the Court reasoned that section 5122 only applies to benefit checks that were received but not negotiated prior to the payee's death, and per the facts of that case, the veteran did not receive his payments before his death, but rather the funds were electronically transferred to his bank account six days after his death. The very language of section 5122, by its own terms, refers to "the check received by a payee", inferring that the payee must be alive at the time the payment is received in order for the benefits to be paid. The legislative history of sections 5121 and 5122 reveals that Congress intended that accrued benefit payments directed to a payee after his or her death be payable under section 5121 rather than under section 5122. S. Rep. No. 227 (1953), reprinted in 1953 U.S.C.C.A.N. 1665, 1666. The estate of a deceased veteran simply does not fall within the class of individuals eligible to receive accrued benefits under section 5122. See Wilkes, supra. Furthermore, the deceased veteran's estate also does not fall under any specified category of payees for accrued benefits under the previously discussed section 5121 and 38 C.F.R. § 3.1000(a)(1)-(4). Although the Board is sympathetic to the appellant's claim and the particular circumstances therein, action by the Board and VA is bound by the applicable law and regulations as written. 38 U.S.C.A. § 7104(c). The appellant, the mother of the veteran, does not fall within a specifically enumerated category of recipients under section 5121(a) because she is not a child, spouse, or dependent parent of the veteran. In addition, since the benefit payments were issued after the veteran's death, payment to the estate of the deceased veteran is not authorized under section 5122. In sum, the relevant facts are not in dispute and, therefore, it is the law rather than an interpretation of the evidence, which governs the outcome of this case. Accordingly, her claim must be denied for lack of legal merit. See Cacalda v. Brown, 9 Vet. App. 261, 265 (1996) (where law is dispositive, not evidence, the appeal should be terminated for lack of legal merit or entitlement); accord Luallen v. Brown, 8 Vet. App. 92 (1995); Sabonis v. Brown, 6 Vet. App. 426, 430 (1994), appeal dismissed, 56 F.3d 79 (Fed. Cir. 1995). As such, the appellant has no legal entitlement to accrued benefits in the amount of $490,063. ORDER As the appellant has no legal entitlement to accrued benefits, the appeal is denied. ____________________________________________ THERESA M. CATINO Acting Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs