Citation Nr: 1120298 Decision Date: 05/25/11 Archive Date: 06/06/11 DOCKET NO. 07-28 036A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Nashville, Tennessee THE ISSUE Entitlement to waiver of recovery of an overpayment of benefits in the amount of $6,273.00 (US dollars). REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD Patrick J. Costello, Counsel INTRODUCTION The Veteran had active military service from May 1961 to January 1965. This matter comes before the Board of Veterans' Appeals (Board) from a January 2007 decision of the Committee on Waivers and Compromises (Committee) of the Nashville, Tennessee, of the Department of Veterans Affairs (VA). FINDINGS OF FACT 1. The Veteran obtained a divorce from Wife G on May [redacted], 2002. For VA compensation purposes, prior to that date, the Veteran was in receipt of VA benefits which included additional benefits for his dependent wife. 2. On October [redacted], 2002, the Veteran married Wife C. At that time, the Veteran was still receiving VA benefits to include additional benefits for his dependent wife. 3. The VA did not learn of the Veteran's divorce from Wife G and the subsequent marriage of the Veteran to Wife C until June 2006. 4. The Veteran is not shown to have committed fraud, misrepresentation, or bad faith in the creation of the overpayment. 5. For the period from May [redacted], 2002, to October [redacted], 2002, the Veteran received dependency benefits to which he was not entitled, because he had not advised VA of his divorce and he was not married during that time. 6. The Veteran was at fault in the creation of an overpayment due to his failure to report his divorce from Wife G in May 2002. 7. If the monies paid to the Veteran based on his failure to report that he was divorced from May [redacted], 2002, to October [redacted], 2002, were not recouped, it would result in unfair enrichment to the Veteran. 8. For the period from October [redacted], 2002, to June 30, 2006, the Veteran received dependency benefits to which he was entitled, because during his receipt of those benefits he was married, despite not having advised VA of his new wife during the period of that running award. 9. A partial waiver of repayment of the monies paid to the Veteran based on the time that he was remarried, from October [redacted], 2002, to June 30, 2006, would not result in unfair enrichment to the Veteran. 10. Partial recovery of the overpayment is not against equity and good conscience. CONCLUSIONS OF LAW 1. The recovery of the overpayment of VA benefits for a dependent spouse for the period from October [redacted], 2002, to June 30, 2006, is against equity and good conscience and, therefore, recovery of the amount paid for a dependent spouse from October [redacted], 2002, to June 30, 2006, is not warranted. 38 U.S.C.A. §§ 5107, 5302(a) (West 2002 & Supp. 2010); 38 C.F.R. § 1.963(a), 1.965(a) (2010). 2. The recovery of the overpayment of VA benefits for a dependent spouse for the period from May [redacted], 2002, to October [redacted], 2002, is not against equity and good conscience and, therefore, recovery of the amount paid to the Veteran for the period that he was divorced, from May [redacted], 2002, to October [redacted], 2002, is warranted. 38 U.S.C.A. §§ 5107, 5302(a) (West 2002 & Supp. 2010); 38 C.F.R. § 1.963(a), 1.965(a) (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Board has thoroughly reviewed all the evidence in the Veteran's claims file. Although the Board has an obligation to provide reasons and bases supporting this decision, there is no need to discuss, in detail, the evidence submitted by the appellant or on his behalf. See Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000) (the Board must review the entire record, but does not have to discuss each piece of evidence). The analysis below focuses on the most salient and relevant evidence and on what this evidence shows, or fails to show, on the claim. The appellant should not assume that the Board has overlooked pieces of evidence that are not explicitly discussed herein. See Timberlake v. Gober, 14 Vet. App. 122 (2000) (the law requires only that the Board address its reasons for rejecting evidence favorable to the appellant). Also, the Board must assess the credibility and weight of all evidence, including the medical evidence, to determine its probative value, accounting for evidence which it finds to be persuasive or unpersuasive, and providing reasons for rejecting any evidence favorable to the appellant. Equal weight is not accorded to each piece of evidence contained in the record; every item of evidence does not have the same probative value. When all the evidence is assembled, VA is responsible for determining whether the evidence supports the claim or is in relative equipoise, with the appellant prevailing in either event, or whether a preponderance of the evidence is against a claim, in which case, the claim is denied. See Gilbert v. Derwinski, 1 Vet. App. 49 (1990). The Veteran has come before the Board expressing disagreement with having to repay an overpayment of benefits. In April 1991, the Veteran was notified that he was awarded a total disability evaluation based on individual unemployability due to his service-connected disabilities. He was further informed that he would also receive special monthly compensation as a result of the loss of use of one eye. Moreover, he was told that the rate of at which he would be paid would be at the rate that included his spouse and then minor child. The letter also informed him that if there was any change in the status of dependents, he should notify the RO immediately as most changes would affect the monthly rate and prompt notification could prevent or reduce an overpayment. Approximately seven years later, the RO contacted the Veteran in the form of a letter attached to VA Form 21-0538, Status of Dependents Questionnaire. The RO reminded the Veteran that the compensation he was receiving from the VA included an amount for his spouse. The Veteran was further instructed that he needed to report any "changes in the number of your dependents". The letter further stated: To verify your continued entitlement to these additional benefits, you must complete and return the form on the reverse side of this letter. If there is no change in the number of your dependents, you will continue to receive your present rate. If the number of your dependents has changed, for example, the loss or additional of a dependent, we will reduce or increase your payments accordingly. In response to that letter, the Veteran informed the VA that he was married to Wife G. No additional dependents were listed on the form. Nearly eight years later, the RO once again wrote the Veteran in the form of a letter attached to VA Form 21-0538, Status of Dependents Questionnaire. The RO reminded the Veteran that the compensation he was receiving from the VA included an amount for his spouse. The Veteran was further instructed that he needed to report any "changes in the number of your dependents". The Veteran responded by noting that he had married Wife C on October [redacted], 2002. The response was received at the RO on June 13, 2006. The Board would note that between the form that was sent in 1998 and the form that was forwarded to the Veteran in 2006, the RO had not sought confirmation of the Veteran's dependents. However, it is also recognized that the Veteran had not informed the VA of any change. A report of contact dated in September 2006 reflects that the Veteran reported via telephone that he divorced Wife G on July [redacted], 1991. That same month, the RO informed him that his spouse was removed effective September 19, 2006, and that he would be notified under separate cover of the resulting overpayment. In his substantive appeal, the Veteran reported that he did not speak to anyone at VA by telephone on the date in question and never reported the information that was included in the report of contact. As the divorce certificate reflects that the Veteran was divorced from Wife G on May [redacted], 2002, and there is no other indication of record that there was a divorce prior to that date, the Board will not assign any probative weight to the contents of the report of contact. The Veteran submitted a copy of his divorce decree from Wife G and a copy of his marriage certificate to Wife C. On the first form, it was reported that the Veteran was divorced from Wife G on May [redacted], 2002; the second form showed that the Veteran was married to Wife C on October [redacted], 2002. In other words, the number of dependents that the Veteran had prior to May [redacted], 2002, was one, and the number of dependents that the Veteran had on October [redacted], 2002, forward was also one. The only time that he did not have a dependent spouse was for the time period extending from May [redacted], 2002, to October [redacted], 2002. Following those submissions, the RO contacted the Veteran via a letter that was sent in October 2006. The RO informed the Veteran that he should have received benefits to include Wife G until June 1, 2002, the first of the month after his divorce of May [redacted], 2002, and benefits to include Wife C from July 1, 2006, to the present. The July 2006 date was used because it was the first day of the month after the RO received notification of the marriage between the Veteran and Wife C. After being notified of the overpayment amount, the Veteran requested a waiver of overpayment of the amount of $6273.00 (US dollars). The Veteran asserted that the debt would not have happened if he had properly reported information. He also asserted that he was not trying to hide his marital status as he did not receive a declaration of status of depedents form after his divorce until May of 2006, and once he received the form, he promptly reported his current wife. He also asked that his medical status be considered as he is sometimes not all there. In his substantive appeal, he asserted that he is owed all but $540.00, which covers the period of time that he was not married. After reviewing all available documents, the Committee on Waivers determined in January 2007 that waiver of recovery of the overpayment would not be against "equity and good conscience". The Veteran has appealed that action. As an initial matter, the Board notes that the present case involves Chapter 53 of Title 38 of the Unites States Code, and therefore the duty to notify and assist provisions of the Veterans Claims Assistance Act of 2000 [VCAA] do not apply. Barger v. Principi, 16 Vet. App. 132, 138 (2002); see also, 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 2010). Even though the VCAA does not apply, the Board sees that the RO notified the Veteran of the relevant statutes and regulations in its August 2007 statement of the case (SOC). The Veteran has provided written statements in support of his claim, and his representative submitted written correspondence on his behalf. The Board finds that he has been adequately notified of the relevant statutes and regulations and has been given the opportunity to submit any additional evidence he might have to support his waiver request. Accordingly, the Board will address the merits of his request. Because the Veteran has not challenged the validity of the debt, the question now before the Board is whether a waiver of recovery of an overpayment may be granted. Pursuant to 38 U.S.C.A. § 5302(a) (West 2002), a claimant is allowed to seek a waiver of recovery of an overpayment of VA benefits. The Secretary of VA is authorized to grant a waiver of recovery of indebtedness when collection of the debt would be against "equity and good conscience." 38 U.S.C.A. § 5302(a) (West 2002); 38 C.F.R. §§ 1.962, 1.963(a) (2010). Under the criteria set out in 38 U.S.C.A. § 5302(c) (West 2002), the law precludes a waiver of recovery of an overpayment or the collection of any indebtedness where any one of the following elements is found to exist: (1) fraud, (2) misrepresentation, or (3) bad faith. 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. § 1.962(b) (2010). Consequently, before the Board may determine whether equity and good conscience affords the Veteran a waiver, the Board must first determine whether there was an indication of fraud, misrepresentation, or bad faith on his part in connection with the claim. The Board recognizes that the Committee on Waiver of Indebtedness has issued a determination as to whether fraud, misrepresentation, or bad faith on the part of the Veteran caused the creation of the overpayment. The Committee has found, in January 2007, that there was no evidence of fraud, misrepresentation, or bad faith. Where there is no fraud, misrepresentation, or bad faith on the service member's part with respect to the creation of the overpayment at issue, waiver of recovery of the assessed overpayment is not precluded pursuant to 38 U.S.C.A. § 5302(a) (West 2002 & Supp. 2010). The Board must determine whether recovery of the indebtedness would be against equity and good conscience, thereby permitting waiver under 38 U.S.C.A. § 5302(a) (West 2002 & Supp. 2010) and 38 C.F.R. §§ 1.963(a), 1.965(a) (2010). Regulations provide that the standard of "equity and good conscience" will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the Government's rights. 38 C.F.R. § 1.965(a) (2010). The elements of equity and good conscience are as follows: (1) fault of debtor, where actions of the debtor contribute to creation of the debt; (2) balancing of faults, weighing fault of debtor against VA fault; (3) undue hardship, whether collection would deprive debtor or family of basic necessities; (4) defeat the purpose, whether withholding of benefits or recovery would nullify the objective for which benefits were intended; (5) unjust enrichment, failure to make restitution would result in unfair gain to the debtor; (6) changing position to one's detriment, reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. This list of elements is not intended to be all-inclusive. 38 C.F.R. § 1.965(a) (2010). As indicated, the RO has determined that there is no evidence of fraud, misrepresentation, or bad faith on the part of the Veteran in the creation of the indebtedness. The evidence of record supports that conclusion. The Veteran was in possession of marriage licenses indicating he was continually married (to Wife G and Wife C in turn) over the entire period of the overpayment, except for the period extending from May [redacted], 2002, to October [redacted], 2002. Although he did have an obligation to inform VA of the change in the identity of the wife included in his award payments, there is no question that the Veteran was, in fact, married during the period in which he continued to receive his dependency benefits, not to include the time period extending from May [redacted], 2002, to October [redacted], 2002. The law governing the payment of such benefits only requires that the Veteran have a spouse, but does not specify which spouse. See 38 U.S.C.A. §§ 1115 (West 2002) (additional compensation for dependents payable where an otherwise eligible veteran "has a spouse but no child"). Because he failed to timely advise VA of his divorce in May 2002, the Board finds that the Veteran was solely at fault in the creation of an overpayment. The Board further concludes that the creation of the overpayment cannot be considered to have resulted from VA error. Clearly, an overpayment commenced when he was divorced and continued to receive additional compensation for a spouse because he did not timely advise VA. In the evaluation of whether equity and good conscience necessitates a favorable waiver decision, the Board must consider all the specifically enumerated elements applicable to a particular case. Ridings v. Brown, 6 Vet. App. 544, 546 (1994); Cullen v. Brown, 5 Vet. App. 510, 512 (1993). If warranted, the Board may waive a portion of the debt. Jordan v. Brown, 10 Vet. App. 171 (1997). When, in fully weighing and balancing each equitable factor, there is an approximate balance of positive and negative evidence as to any material issue, VA shall give the veteran the benefit of the doubt. 38 U.S.C.A. § 5107(b) (West 2002 & Supp. 2010). See also Dela Cruz v. Principi, 15 Vet. App. 143, 148-49 (2001). As outlined below, after weighing all of the enumerated factors, the Board finds that partial waiver of overpayment in the amount paid to the Veteran during the time period extending from October [redacted], 2002, to June 30, 2006, is warranted. The first and second elements pertain to the fault of the debtor versus the fault of VA. The responsibility in the creation of the overpayment of benefits rests with the Veteran, inasmuch as it was due to his failure to keep the RO timely apprised of his divorce from Wife G and his remarriage to Wife C. Thus, the Board finds that he bears primary fault in the creation of the overpayment at issue. With respect to the third element, whether the Veteran would be subjected to undue hardship if the debt were recovered, the evidence of record does not show that payment of this debt, either in part or in whole, would cause undue hardship to the Veteran. The Veteran has not reported that repayment of this amount would be a financial hardship. The fourth element of equity and good conscience does support, however, a partial waiver of overpayment. Again, the fourth element to be addressed is whether recovery of the overpayment would defeat the purpose for which the benefits were intended. Here, VA awarded benefits at the rate which included one dependent. For the time period extending from May [redacted], 2002, to October [redacted], 2002, he was without said dependent. However, for the time period prior to May [redacted], 2002, he was married to Wife G, and for the time period after October [redacted], 2002, he was married to his second wife, Wife C. There was no specific requirement that the Veteran inform the VA of the name of the dependent - he just was supposed to have a dependent. Since the Veteran was technically eligible to receive the benefits paid, to seek collection of those monies would defeat the purpose for which the dependent benefits were intended. Nevertheless, for the time period extending from May [redacted], 2002, to October [redacted], 2002, recovery of the overpayment would not defeat the purpose for which the benefits were intended. This is because the Veteran was not eligible to receive the benefits paid to him for a dependent spouse as he was not married during that time period. To collect those monies would not defeat the purpose for which the benefits were intended. Also for consideration is whether a waiver of overpayment would cause "unjust enrichment." Put another way, the Board must contemplate whether failure to make restitution would result in unfair gain. For the period extending from May [redacted], 2002, to October [redacted], 2002, there would be unfair gain because for this period the Veteran was not entitled to those monies. In other words, the Veteran would be unjustly enriched for an error of omission he committed. The Veteran has admitted this fact via his statements made to the Board in conjunction with this appeal and he has, in essence, volunteered to pay back the money for this time period so he would not receive something (money) for which he was not entitled thereto. Hence, the recoupment of those monies would not result in unjust enrichment. Nevertheless, for the period extending from October [redacted], 2002, to June 30, 2006, to allow the Veteran to keep the monies previously paid to him would not result in unjust enrichment on the part of the Veteran. This is because he was actually entitled to receive the monies paid to him (for a dependent to whom he was married thereto) during this time period. The sixth element to be considered is whether reliance on VA benefits resulted in the Veteran relinquishing a valuable right or incurring a legal obligation. The Veteran has not claimed that he relinquished any right or incurred any legal obligation or that he relied upon VA to his detriment, nor do the facts show such. Thus, this sixth element does not support the Veteran's request for a waiver of recovery of the overpayment. While the Veteran has asked that the VA consider the fact that he is not all there due to medical conditions, the Board finds that he is able to communicate with VA and provide meaningful information concerning his spouses, to include documentation showing when he was married and divorced. He has also communicated with VA about his appeal for waiver of recovery of the overpayment and there is no showing that he is currently incompetent or that he was incompetent at the time of his divorce and subsequent marriage. The record does not demonstrate any additional factors which should be considered in adjudicating the Veteran's claim for a waiver of the indebtedness, and the Veteran has identified no other such factors. After weighing all of the enumerated factors, the Board finds that total recovery of the overpayment violates the principles of equity and good conscience. However, although the Veteran is at fault for creating the overpayment as he did not inform the VA when he was divorced from Wife G and not married to Wife C, it has been shown that full recovery of the debt would defeat the purposes for which the benefits were intended and partial waiver of recovery of the debt would not result in his unjust enrichment. Therefore, the Board finds that partial waiver of recovery of the overpayment in the amount paid for the time extending from October [redacted], 2002, to June 30, 2006, is warranted. Thus, the amount of indebtedness should be calculated as the amount that was paid to the Veteran based on him not reporting that he was divorced effective on May [redacted], 2002, to the date upon which he remarried, October [redacted], 2002, minus any monies already recouped (if any). In reaching the above conclusions, the Board has considered the Veteran's statements and the facts surrounding his divorce and remarriage. The Board has found the Veteran's statements concerning the issue on appeal to be competent, credible and probative. However, the Board finds that waiver of recovery of the indebtedness from May [redacted], 2002, to October [redacted], 2002, is not justified pursuant to the principles of equity and good conscience, based on the totality of the evidence, as was discussed above. Again, the Board finds that his statements support a partial waiver of recovery of overpayment of benefits. As the preponderance of the evidence is in favor of his claim, the "benefit-of-the-doubt" rule applies. 38 U.S.C.A. § 5107(b) (West 2002); 38 C.F.R. §§ 3.102, 4.3 (2010); Gilbert v. Derwinski, 1 Vet. App. 49, 50 (1990). (CONTINUED ON NEXT PAGE) ORDER Waiver of recovery of the overpayment of VA benefits that were paid based on the Veteran's failure to report that he was divorced for the period extending from May [redacted], 2002, to October [redacted], 2002, is denied. Waiver of recovery of the overpayment of VA benefits that were paid based on the Veteran's failure to report that he was remarried for the period extending from October [redacted], 2002, to June 30, 2006, is granted. ____________________________________________ S. S. TOTH Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs