Citation Nr: 1327154 Decision Date: 08/26/13 Archive Date: 08/29/13 DOCKET NO. 09-20 848 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office and Insurance Center in Philadelphia, Pennsylvania THE ISSUE Entitlement to a waiver of recovery of an overpayment of death pension benefits in the amount of $22,049.00. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD L. J. N. Driever INTRODUCTION The Veteran had active service from April 1954 to July 1957. He died on December [redacted], 1978. The appellant is recognized by VA as his surviving spouse. This claim comes before the Board of Veterans' Appeals (Board) on appeal of a September 2007 decision of the Committee on Waivers and Compromises (Committee) at the Department of Veterans Affairs (VA) Regional Office (RO) and Insurance Center in Philadelphia, Pennsylvania. The electronic file (Virtual VA) includes additional pertinent documents that are not in the claims file, which the RO considered in support of this claim in a Statement of the Case issued in March 2009. FINDINGS OF FACT 1. The appellant, as the deceased Veteran's surviving spouse, was in receipt of death pension benefits from December 1981 to April 2007, when she informed VA that she had remarried on August [redacted], 1993 and that her spouse had died in 2003. 2. The receipt of such benefits being predicated on the appellant remaining unmarried, VA terminated the appellant's death pension benefits, effective August 1, 2013, resulting in an overpayment of such benefits, calculated in the amount of $22,049. 3. The overpayment of death pension benefits results from the appellant's bad faith in intentionally failing to report her marital status on multiple occasions since 1993, despite her knowledge that she was required to do so and that an overpayment would result from her failure to do so. CONCLUSION OF LAW A waiver of recovery of an overpayment of death pension benefits in the amount of $22,049 is precluded by law. 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. §§ 1.965(b), 3.660(a)(1) (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. The Veterans Claims Assistance Act of 2000 (VCAA) The VCAA describes VA's duties to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5106, 5107, 5126 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.326(a) (2012). The United States Court of Appeals for Veterans Claims (Court), however, has held that the VCAA notification procedures do not apply in waiver cases. Lueras v. Principi, 18 Vet. App. 435 (2004); see also Barger v. Principi, 16 Vet. App. 132 (2002). Further discussion of the VCAA and VA's duties thereunder is therefore unnecessary in this case. In any event, Chapter 53 of Title 38 of the U.S. Code, which governs waiver requests, includes its own notice provisions. 38 U.S.C.A. § 5302(a), (b) (West 2002). In this case, the RO complied with these notice provisions by sending the appellant letters in May 2007 notifying her that she was no longer entitled to the death pension benefits she had been receiving and reducing such benefits, effective August 1, 1993. The RO provided the appellant an opportunity to submit a waiver of recovery of the overpayment and described the procedures for doing so. II. Analysis The appellant, as the deceased Veteran's surviving spouse, was in receipt of death pension benefits from December 1981 to April 2007. During this time period, VA sent the appellant multiple VA Forms 21-0512S (Section 306 Eligibility Verification Reports (EVRs) (Surviving Spouse) asking her to report, in pertinent part, her marital status. She completed forms in November 1985, January 1987, January 1988, January 1989, December 1989, December 1990, November 1991, December 1992, January 1994, April 1996, and February 1997. On each occasion, she consistently marked that she had not remarried since the Veteran died. Throughout the years, the appellant was also provided numerous letters (approximately 18) from VA that included an attached VA Form 21-8767. See RO letters to the appellant, dated in January 1982; February 1983; August and October 1984; July, October, and December 1987; March and November 1988; January and August 1989; January and December 1990; November 1991; July 1992; and February, May, and September 1993. This form notified the appellant that she must notify VA immediately of any change in her marital status. She was notified that the law provides that entitlement to benefits is lost if a surviving spouse marries, and that failure to notify VA of these changes immediately would result in an overpayment that is subject to recovery. In March 2007, VA sent the appellant a letter reminding her to report any pertinent changes, including marriage and divorce, which might affect the receipt of VA benefits. In April 2007, the appellant informed VA by letter that she had remarried on August 27, 1993 and that her spouse had died in 2003. She indicated that she had sent a copy of her marriage certificate to the VARO in Columbia, South Carolina in September 1993 and that, because she did not receive an annual EVR in response, she thought everything was fine and she was entitled to the death pension benefits. The appellant attached the 1993 Marriage Certificate to her written statement and asked VA to adjust her death pension benefits accordingly. The receipt of such benefits being predicated on the appellant remaining unmarried, the RO terminated the appellant's death pension benefits, effective August 1, 2013, resulting in an overpayment of such benefits, calculated in the amount of $22,049.00. In June 2007, in a timely fashion, see 38 U.S.C.A. § 5203(a) (West 2002), the appellant filed for a waiver of recovery of the overpayment. She is not challenging the lawfulness of the overpayment. See Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) (holding that it is improper to adjudicate a waiver application under the VA loan guaranty program without first deciding an appellant's challenge to the lawfulness of the debt asserted). In written statements dated October 2007, April 2009 and June 2013, the appellant asserts that a waiver of recovery of the overpayment should be granted on the basis that her monthly income, comprised solely of Social Security benefits, totals $772.00, hundreds of dollars less than her monthly expenses. She contends that she already juggles bills, precluding her from agreeing to a repayment schedule. She questions the Committee's finding that she acted in bad faith prior to 2007 by not informing VA that she had remarried. She argues that she did inform VA of the remarriage in 1993. She further argues that, when she completed the EVR in 1994, she simply made a mistake by checking the box indicating that she had not remarried. She claims that, because she continued to receive her pension benefits and did not receive any other EVRs thereafter, she thought she was eligible to continue receiving such benefits. A finding of fraud or misrepresentation of a material fact or bad faith precludes a grant of a waiver of recovery of an overpayment. 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. §§ 1.963(a), 1.965(b)(1) (2012). The term "bad faith" generally describes unfair or deceptive dealing by one who seeks to gain thereby at another's expense. 38 C.F.R. §1.965(b)(2) (2012). The operative language in 38 C.F.R. § 1.965(b)(2) limits bad faith to cases in which there is an intent to seek an unfair advantage and that a mere negligent failure to fulfill a duty or contractual obligation is not an appropriate basis for a bad faith determination. Richards v. Brown, 9 Vet. App. 255 (1996). In this case, the record indicates that the appellant acted in bath faith when she intentionally, rather than negligently, mislead VA by failing to report her 1993 remarriage prior to 2007. Contrary to her assertions, there is no documentation of record dated prior to 2007 which informs VA of her 1993 remarriage. In addition, although she refers to a 1994 EVR in which she mistakenly marked the wrong box indicating that she had not remarried since the Veteran's death, there are other EVRs of record dated since 1993 (i.e., in 1996 and 1997) signed by the appellant with the same response. It is conceivable that an individual might make a mistake of marking the wrong box on one occasion, but in this case, in 1994, 1996 and 1997, the appellant marked the same box. Further, the appellant was familiar with the form and the questions on it, as she had been completing the same form on an annual basis since 1985. Her assertion is therefore not credible. In addition, for years the appellant received additional VA death pension benefits based on a certain number of dependents. Each year, VA informed the appellant by letter that she needed to notify VA of any change in the status of her dependents. In 1987, however, VA learned from the Social Security Administration that a change in the appellant's dependents had occurred, which the appellant had not reported. An overpayment of death pension benefits, which the appellant did not dispute, resulted. The appellant is thus familiar with the importance of reporting status changes and the consequences of failing to do so. Even after creating one overpayment, however, she refrained from reporting her 1993 remarriage and denied that it occurred on EVRs dated in January 1994, April 1996, and February 1997. The Board thus finds that the overpayment of death pension benefits at issue in this case results from the appellant's bad faith in intentionally misrepresenting her marital status on multiple occasions since 1993. Based on this fact, the Board concludes that, regardless of the appellant's financial status or whether recovery of the $22,049.00 overpayment would be against the standard of equity and good conscience, a waiver of recovery of that overpayment is precluded by law. See 38 U.S.C.A. § 5302(a) (West 1991); 38 C.F.R. §§ 1.962, 1.963(a), 1.965 (2000) (directing that considerations of equity and good conscience are inapposite where fraud, misrepresentation or bad faith is found). ORDER A waiver of recovery of an overpayment of death pension benefits in the amount of $22,049.00 is denied. ____________________________________________ P. M. DILORENZO Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs