Citation Nr: 1326378	
Decision Date: 08/19/13    Archive Date: 08/26/13

DOCKET NO.  13-03 375A	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Newark, New Jersey



THE ISSUE

Entitlement to reimbursement of $2,310.00, claimed as an outstanding expense relating to a Specially Adapted Housing project.



REPRESENTATION

Appellant represented by:	Paralyzed Veterans of America, Inc.



ATTORNEY FOR THE BOARD

J. H. Nilon, Counsel
INTRODUCTION

This appeal has been advanced on the Board's docket pursuant to 38 U.S.C.A. § 7107(a)(2) (West 2002) and 38 C.F.R. § 20.900(c) (2012).  

The Veteran served on active duty from January 1953 to December 1954.  The Veteran died in December 2011; the present appellant is the Veteran's widow.

This matter comes before the Board of Veterans' Appeals (Board) on appeal of a June 2012 administrative decision by the Department of Veterans Affairs (VA) Regional Office (RO) in Newark, New Jersey that denied the appellant's request for reimbursement of $2,310.00, claimed as an outstanding expense relating to a Specially Adapted Housing (SAH) project.


FINDINGS OF FACT

1.  SAH was authorized by VA in November 2011 secondary to the Veteran's service-connected amyotrophic lateral sclerosis (ALS).

2.  The Veteran died in December 2011.

3.  In January 2012 the SAH project was found by VA to be complete, and all grant funds were thereupon disbursed and the escrow account was cleared.

4.  In March 2012 the appellant complained she was not satisfied with the work performed, and in April 2012 she paid the sum of $2,310.00 to a contractor for restoration of grounds that had been disturbed during the SAH installation project. 

5.  The payment of $2,310.00 was not made by the veteran prior to his death and was not an outstanding contractual obligation or an approved expense.
CONCLUSION OF LAW

The payment by the appellant of $2,310.00 was not a valid outstanding SAH expense for which reimbursement can be considered.  38 U.S.C.A. § 2101 (West Supp. 2012); 38 C.F.R. § 3.809 (2012); Veterans Benefits Administration Manual M26-12, Section D (2007). 


REASONS AND BASES FOR FINDINGS AND CONCLUSION

Duties to Notify and Assist

Before addressing the merits of the Veteran's claim on appeal, the Board is required to ensure that the VA's "duty to notify" and "duty to assist" obligations have been satisfied under the VCAA.  See 38 U.S.C.A. §§ 5103, 5103A (West 2002); 38 C.F.R. § 3.159 (2012). 

The VA is required to assist a claimant in obtaining evidence necessary to substantiate a claim but is not required to provide assistance to a claimant if there is no reasonable possibility that such assistance would aid in substantiating the claim.  The VA is required to notify a claimant and the claimant's representative, if any, of any information, and any medical or lay evidence, not previously provided to the Secretary that is necessary to substantiate the claim.  As part of the notice, the VA is to specifically inform the claimant and the claimant's representative, if any, of which portion, if any, of the evidence is to be provided by the claimant and which part, if any, the VA will attempt to obtain on behalf of the claimant.  In addition, the Court has held that the plain language of 38 U.S.C.A. § 5103(a) requires that notice to a claimant be provided "at the time" of, or "immediately after," the VA's receipt of a complete or substantially complete application for VA-administered benefits.  Pelegrini v. Principi, 18 Vet. App. 112, 119 (2004).  

The present appellant has not alleged or demonstrated any prejudice with regards to the content or timing of notice.  See Shinseki v. Sanders, 129 S.Ct. 1696 (2009) (reversing prior case law imposing a presumption of prejudice on any notice irregularity and clarifying that the burden of showing that an error is harmful or prejudicial normally falls upon the party attacking the agency's determination).  

The RO has provided assistance to the appellant as required under 38 U.S.C.A. § 5103A and 38 C.F.R. § 3.159(c), as indicated under the facts and circumstances in this case.  Medical examinations and medical records are not relevant to the issue on appeal.  The appellant has been advised of her entitlement to a hearing before the RO's hearing officer or before the Board, but she has not requested such a hearing.

The appellant's representative submitted an Informal Hearing Presentation in July 2013 asserting that if the Board does not grant the benefit claimed the case should be remanded to the RO to obtain the documents cited in the RO's Statement of the Case (SOC) issued in January 2013.  The Board disagrees.  In her Substantive Appeal the appellant responded to the SOC on a line-by-line basis, and the Board has accepted her account as credible; further, there is no dispute as to the content of any document cited in the SOC.  Remand of the case to obtain the documents would therefore present no benefit to the appellant; remands that would only result in imposing additional burdens on VA, with no benefit flowing to the claimant, are to be avoided.  Sabonis v. Brown, 6 Vet. App. 426, 430 (1994).

The appellant has not made the RO or the Board aware of any additional evidence that needs to be obtained in order to fairly decide this appeal, and has not argued that any error or deficiency in the accomplishment of the duty to notify and duty to assist has prejudiced her in the adjudication of this appeal.  

Based on a review of the claims file, the Board finds that there is no indication in the record that any additional evidence relevant to the issue to be decided herein is available and not part of the claims file.  Therefore, the Board finds that the duty to notify and duty to assist have been satisfied and will proceed to the merits of the appeal.

Applicable Legal Principles

Specially adapted housing (SAH) is granted under the provisions of 38 U.S.C.A. § 2101 (West Supp. 2012); see also 38 C.F.R. § 3.809 (2012).  There is no dispute that the Veteran was qualified to SAH by the nature of his service-connected ALS disability.

The Government of the United States had no liability in connection with any housing unit, or necessary land therefore, or adaptation acquired under the provisions of Chapter 21.  38 U.S.C.A. § 2105 (2002).

The SAH program is administered under the guidelines of Veterans Benefits Administration (VBA) Manual M26-12 (Specially Adapted Housing Grant Processing Procedures, Loan Guaranty Operations for Regional Offices).  Situations arising in the case of the death of a Veteran are addressed in M26-12, Section D (Death Cases).  

The objective for death cases is to return the veteran's estate to the same condition it was prior to grant approval.  The veteran's death can occur at any of the following states of the grant process: (1) before the grant is approved; (2) the grant is approved but the disbursement check has not been issued by the United States Treasury Department; (3) the grant is approved and the grant check has been received, but the grant check has not been placed in escrow; or, (5) the grant is approved and the escrow account is established.  M26-12, pg. 15-D-2.

"Outstanding expenses" may be claimed: (1) by the veteran's family/estate for funds personally expended by the veteran for costs related to the grant; (2) by builders for specific costs expended for the project; (3) for attorney services; and, (4) by architects/draftsmen for preparation of plans and specifications. M26-12, pg. 15-D-10.   

When outstanding expenses are claimed at project completion, the construction or remodeling must have been completed according to the plans/specifications unless specified otherwise by the family/estate; and, the Central Office (CO) must approve any changes to plans/specifications and expenditures of grant funds.  M26-12, pg. 15-D-10-11.   

The purpose of releasing grant funds for outstanding expenses is to restore the veteran's estate to its condition at the time of the veteran's filing of VA Form 26-4555c (Veteran/Servicemember's Supplemental Application for Assistance in Acquiring Specially Adapted Housing) or VA Form 26-4555d (Veterans Application for Assistance in Acquiring Special Housing Adaptations); payment is specifically not intended as a way of providing the veteran's estate a home.  M26-12, pg. 15-D-14. 

Eligibility for release of grant funds for outstanding expenses may be considered when the veteran undertook contract expenses: (1) in anticipation of receiving a grant; (2) before his/her death; and, (3) after filing either VA Form 26-4555c or VA Form 26-4555d.   M26-12, pg. 15-D-14. 

The death of a veteran after grant disbursement (i.e., when the grant funds have been deposited into an escrow account) presents no special administrative problem for VA, provided the home is completed and acquired by the veteran or his/her estate.  VA may reimburse the estate the amount necessary to pay off contract obligations or other approved related expenses incurred before or as a result of the acquisition of a specially adapted home.  The CO must approve completion and use of the grant funds regardless of the stage of construction.  M26-12, pg. 15-D-15.
   
Disbursement of outstanding expenses may be made when the grant check was never vouchered, when the grant check had been returned to the United States Treasury or when grant funds were in escrow.  M26-12, pg. 15-D-15.  There is no provision in the manual for disbursement of expenses after the escrow account has been cleared and closed.

When there is a proximate balance of positive and negative evidence regarding any issue material to the determination of a matter, VA shall give the benefit of the doubt to the claimant.  38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102.  To deny a claim on its merits, the preponderance of the evidence must be against the claim.  Alemany v. Brown, 9 Vet. App. 518, 519 (1996), citing Gilbert v. Derwinski, 1 Vet. App. 49, 55 (1990).  

Evidence

The following timeline is cited in the RO's Statement of the Case (SOC) issued in January 2013.  To the extent that the appellant disputes any item therein, such dispute is displayed in brackets.

In February 2011 the RO issued a rating decision that in relevant part granted SAH benefits to the Veteran.  The rating decision was received electronically by VA's Cleveland Regional Loan Center (RLC) in March 2011.  During the same month an SAH agent completed an interview with the Veteran to explain the SAH program and to determine the feasibility of the Veteran's home.  The home was deemed to be feasible for use of the grant.

In November 2011 an SAH grant in the amount of $30,698.99 was approved for the purpose of improving the Veteran's accessibility by providing improved flooring and walkways.  The file contains a voucher dated November 11, 2011, showing that the amount of $30,698.99 was being placed in escrow.  [The appellant asserts that the total grant amount was $63,780.00, of which $30,700.00 was eventually expended and $33,080.00 remained unused.]

The appellant states the Veteran was telephonically advised of the grant approval on November 15, that work began on November 15 and that work was completed on November 25.

On December 1, 2011, the grant check was forwarded to the escrow agent for deposit in escrow.  On December 6, 2011, the grant funds were deposited by the escrow agent and the escrow agreement was executed.  [The appellant contends these transactions actually occurred on November 24, but the Board observes that this distinction is moot.]
[redacted]
The Veteran died on December [redacted], 2011.  The death certificate is not of record, but the appellant had not disputed this date.

On December 20, 2011, the compliance inspection for the first stage draw was completed, and all work was found to be in compliance with the approved plans and specifications.  [The appellant contends this compliance inspection actually occurred on November 28, 2011, prior to the Veteran's death, and that the Veteran stated at the time that he was very happy with the job.  She states VA advised the Veteran at the time that the contactor would return in April to mulch, rake and seed the area around the walk and the patio and restores the area to its original condition.  The Veteran was concerned about the mounds of soil but he was satisfied with the paving and felt the contractor should not have to wait until April to be paid.]

On January 4, 2012, the SAH agent completed the final VA field review and found all work done to be in compliance with the approved plans and specifications.  [The appellant asserts her usual SAH agent was off in December and not available until January 4; the contractors meanwhile had waited six weeks for payment to be released.]

On January 23, 2012, VA received an e-mail from the appellant's e-mail server stating, "I am completely satisfied with the work both contactors did at my home." [The appellant contends the work was completed on November 25 and that the Veteran had notified SAH at the time that he was satisfied with the job.]

On January 24, 2012, the RLC authorized disbursement of the entire $30,698.99 that had been placed in escrow ($24,735.00 to the paving contractor, $5,663.99 to the flooring contactor and $300.00 to the escrow agent).  The funds were thereupon disbursed.

On February 17, 2012, VA received the final accounting close-out statement from the escrow agent showing that all funds were disbursed in accordance with the escrow agreement and that no funds remained in the account.

On March 6, 2012, the appellant called the SAH agent and stated she was not satisfied with the site work that had been done around the new exterior walkways.  The agent explained that he had not noted any non-compliant issued during his final inspection, and also noted that a satisfaction statement had been received.  The agent explained to the appellant that any further work she wanted done to finish the site work/landscaping would be at her own expense.  [The appellant asserts she pointed out the dirt piled around the ground and was told that the contractor would be back in April to clean and restore the grounds as they were before the pavers were installed.]

On March 13, 2012, the RO sent the appellant a next-of-kin letter asking if any expenses were incurred in anticipation of using the SAH grant.  On April 12, 2012, the appellant responded to the next-of-kin letter by requesting reimbursement of $2,310.00 that she had paid to restore grounds around the sidewalk and patio that were disturbed while installing pavers; she enclosed an invoice showing she had paid $2,310.00 to the paving company that was part of the original SAH grant.

The "paid in full" invoice, dated April 11, 2012, is of record.  The invoice characterizes the work performed as "extra cost to restore grounds around sidewalk and patio that was disturbed when installing the pavers."

On June 15, 2012, the RLC issued the denial of reimbursement on appeal, based on a determination that the expense was incurred after the Veteran's death and was for aesthetic purposes outside the scope of the grant program.  [The appellant asserts that the Veteran's death should not be a factor in the cleanup.  She also asserts the crushed stone in question was not intended to be decorative but rather to keep the weeds and grass from invading the pavers; the original mulch had been destroyed when the pavers were installed.]

In her Notice of Disagreement (NOD) the appellant asserted that during final inspection the VA SAH agent informed her that the contractor would return in April to remove the remaining mound of soil; the soil could not be leveled immediately because doing so would have disturbed the pavers that had been installed.  On April 4, 2012, she advised VA that the contractor would be coming on April 11 to restore the ground to its original condition.  The work performed consisted of removing the mound of soil that had been left over the grass and stones; of raking, leveling and seeding the area; and, of replacing the stones.  For this, she paid the contractor $2,310.00.  She acknowledged that this cost was not in the original contract but asserted that nobody could have anticipated damage to the lawn at the time the contact was written.  She also stated she was told by a VA representative that she would be reimbursed for the expense if she documented the expense by providing a copy of the check and a paid-in-full receipt, which she did.  She also complained that the VA representative who signed the denial was not the same person who had been her SAH agent during the eight months of preparation execution of the project and was not aware of the facts behind the grant.

The appellant submitted a letter to VA dated in February 2013 stating she found it offensive that VA's denial implied that she ran out after the Veteran's death to beautify the property.  She also asserted that $33,080.00 of the grant remained unused, so that reimbursement of the requested amount would still leave $30,770.00 of the grant unused.

Analysis

The appellant essentially contends that the $2,310.00 she spent was an unanticipated sum necessary to complete the SAH project that had been approved by VA, in that the funds were used to restore landscaping that had been damaged during the construction phase.  She also takes exception to the RO's characterization of the expenses claimed as "beautification" rather than as "restoration."  

The Board finds at this point that the work was performed to restore the Veteran's estate to its condition at the time he applied for the grant.  See M26-12, pg. 15-D-14. Accordingly, a claim for outstanding expenses may be considered.  

However, for the following reasons, the appellant's claim must fail.

First, "outstanding expenses" may be claimed by the veteran's family/estate for funds personally expended by the veteran for costs related to the grant; see M26-12, pg. 15-D-10.  Further, reimbursement envisions expenses paid by the veteran in anticipation of receiving a grant; see M26-12, pg. 15-D-14.  The March 2013 letter to the appellant, on which the claim on appeal is based, specifically invited her to identify any expenses the Veteran had incurred while anticipating receiving the SAH grant.  In this case, the expenses claimed were clearly not expended by the Veteran, and were not incurred in anticipation of receiving the grant (instead, they were received after the grant had been approved and the work had been completed).

(The appellant has asserted her indignation that the RO cited the Veteran's death, prior to the incurrence of the expense in dispute, as a relevant factor toward the adjudication of the claim.  The timing of the Veteran's death is in fact a significant factor, in that entitlement to reimbursement revolves around expenses that were personally incurred by a deceased veteran, as noted above.)

Second, the expense claimed was not to pay off contract obligations or other approved expenses; see M26-12, pg. 15-D-15.  In that regard, the contractor was arguably required to return in April and remove the dirt, but the paid-in-full receipt does not cite any cost related to such removal.  Rather, the paid-in-full receipt cites "extra cost to restore grounds" and the appellant quoted this verbatim in her claim; an "extra cost" is by definition non-contractual.  Per M26-12, pg. 15-D-10-11, when outstanding expenses are claimed at project completion the CO must approve any changes to plans/specifications and expenditures of grant funds, but that was not done in this case.  Whereas the expenditure was a non-contractual service not approved by the CO, reimbursement may not be considered.

The appellant states that a VA SAH agent told the Veteran in November 2011 that the work claimed on appeal (mulching, seeding, etc.) would be performed when the contractor returned the following April, and she suggests the Veteran's expression of satisfaction was made with that understanding.   She thus appears to be arguing an equitable theory of promissory estoppel.  While the Board is sympathetic toward the appellant, the Board is bound by law, and its decision is dictated by the relevant statutes and regulations; moreover, the Board is without authority to grant benefits simply because it might perceive such a grant to be equitable.  See 38 U.S.C.A. § 503; see also Harvey v. Brown, 6 Vet. App. 416, 425 (1994).  

Similarly, the appellant asserts she was informed by one or more VA SAH agents that she would be reimbursed for the expense if she provided documentation of payment to VA, which appears to suggest entitlement to restitution under a detrimental reliance theory.  However, as such purported statements were made after she had already paid the contractor the amount in dispute, detrimental reliance is not shown.  In any event, "detrimental reliance" is a theory in equity, and the Board observes that "no equities, no matter how compelling, can create a right to payment out of the United States Treasury that has not been provided for by Congress."  Smith v. Derwinski, 2 Vet. App. 429, 432-33 (1992).  

Finally, the appellant asserts that the SAH grant was originally approved in the amount of $63,780.00, of which $30,700.00 was expended and $33,080.00 remained unused.  The Board simply notes that the amount actually placed in escrow to perform the work contracted was $30,698.99, all of which was expended.  Whether or not the funds envisioned under the original grant were fully utilized is irrelevant to resolution of the issue on appeal.

 In sum, based on the evidence and analysis above the Board finds the claimed sum of $2,310.00 was not a valid outstanding SAH expense for which reimbursement can be considered.  Accordingly, the claim must be denied.

Because the preponderance of the evidence is against the claim the benefit-of-the-doubt rule does not apply.  Gilbert, 1 Vet. App. 49, 54.


ORDER

Entitlement to reimbursement of $2,310.00, claimed as an outstanding expense relating to a Specially Adapted Housing project, is denied.



____________________________________________
C. CRAWFORD
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs