Citation Nr: 1331870 Decision Date: 10/03/13 Archive Date: 10/07/13 DOCKET NO. 10-04 482 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Detroit, Michigan THE ISSUE Entitlement to a waiver of recovery of overpayment of death compensation benefits under 38 U.S.C.A. § 1151 in the amount of $29,619.00, to include whether the withholding of compensation benefits under 38 U.S.C.A. § 1151 to recoup the amount of a settlement under the Federal Tort Claims Act (FTCA) was proper. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD A. Fagan, Associate Counsel INTRODUCTION The Veteran served on active duty from July 1955 to July 1959. He died in July 2005. The appellant is his surviving spouse. This matter is before the Board of Veterans' Appeals (Board) on appeal from June 2009 and October 2009 actions of the Department of Veterans Affairs (VA) Regional Office (RO) in Detroit, Michigan. On her January 2010 substantive appeal, the appellant requested a Board videoconference hearing with a notation of "on phone." A videoconference hearing was scheduled for January 2011; however, the appellant failed to appear. She has not provided good cause for her failure to appear, nor has she requested that the hearing be rescheduled. Accordingly, the appellant's hearing request is considered withdrawn. See 38 C.F.R. § 20.704(d) (2012). As a final preliminary matter and as discussed further below, the Board has assumed jurisdiction of the issue of the propriety of the withholding of DIC payments to recoup the amount of a settlement under the FTCA pursuant to Manlincon v. West, 12 Vet. App. 238, 240-41 (1999), because the Veteran filed a timely notice of disagreement with respect to that issue. The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ) via the Appeals Management Center (AMC), in Washington, DC. VA will notify the appellant if further action is required. REMAND Unfortunately, a review of the record reveals that remand is necessary prior to adjudication of the appellant's claim. With regard to the propriety of the withholding of Dependency and Indemnity Compensation (DIC) payments to recoup the amount of a settlement under the FTCA, the Board finds that the appellant filed a timely notice of disagreement with regard to that claim. It is clear from the appellant's statements, including statements received by VA in December 2009 and February 2010, that the appellant disagrees with VA's finding that recoupment is warranted. Thus the propriety of the recoupment is an issue in appellate status. The record does not reflect that a Statement of the Case (SOC) has been issued on this matter. Manlincon v. West, 12 Vet. App. 238, 240-41 (1999). Historically, in April 2006, the appellant was awarded DIC benefits under 38 U.S.C.A. § 1151. The record shows that the appellant was subsequently awarded a monetary settlement in a claim seeking compensation under the FTCA related to the Veteran's VA treatment and death. In general, an individual cannot receive double compensation by receiving compensation under 38 U.S.C.A. § 1151 and through a settlement under the FTCA. With some exceptions, where a claimant does receive a settlement under a FTCA claim, no payments under 38 U.S.C.A. § 1151 can be made until the amount of the settlement is recouped. In June 2009, the RO informed the appellant that her DIC payments were being withheld in order to recoup a $357,500.00 settlement she received under the FTCA. The same month, the appellant filed a statement challenging the loss of her VA benefits and on a December 2009 Notice of Disagreement and a VA Form 9 received in February 2010, the appellant alleged VA error in finding that she was not entitled to receive the benefits. The Board interprets the appellant's December 2009 and February 2010 statements as a valid notice of disagreement with RO's June 2009 rating action regarding instituting recoupment. Given that the record reflects that the appellant submitted a timely notice of disagreement with regard to the propriety of withholding of DIC payments to recoup the amount of a settlement under the FTCA, the appellant must be afforded a related SOC on that issue. Manlincon, 12 Vet. App. at 240-41. Additionally, the Board finds that prior to readjudication of the claim and issuance of an SOC, further development must be completed. It does not appear that the complete record of the FTCA claim has been associated with the claims file. To that end, although the record contains a February 2007 memorandum from a VA Deputy Assistant General Counsel indicating that the Veteran's estate received a settlement of $357,500.00 under the FTCA, absent from the record is information regarding the settlement distribution. The Board observes that the Veteran had four living children at the time of his death, and the appellant's representative has asserted that a portion of the settlement went to those children with only a small remaining portion going to the appellant. Court documents pertaining to the FTCA settlement confirm that the Veteran's children were interested parties to the settlement, and that distribution of the funds through the estate would be handled through the Gogebic County State Court. The record before the Board does not contain evidence of an official determination of the distribution of the settlement; therefore, it is impossible to accurately determine how much of the settlement was awarded to the appellant. A review of the applicable provision of the Adjudication Procedures Manual, M21-1MR, reflects that, in cases such as this one, specific findings are to be made regarding the distribution where a judgment (settlement) is made to, or for, two or more persons, whether in their individual capacities, or as personal representative of the estate, and the judgment involves a claimant whose award is subject to an offset. The manual provision requires the Veterans Service Center Manager (VSCM) to request a finding, or determination, from the Regional Counsel if the claims folder is at the RO. If the claims folder is located in VA's Central Office, such a determination is to be made by the General Counsel. See M21-1MR, Part IV, Subpart iii, 3.G.36.d. Additionally, pertaining to the request for a waiver of overpayment in the amount of $29, 619.00, the appellant alleges financial hardship. While such hardship is not apparent by the financial status report submitted in September 2009, the appellant asserted in her November 2009 notice of disagreement that medical bills relating to the Veteran's care remained outstanding and unpaid. Given that there may be outstanding evidence pertaining to the appellant's financial status, the Board finds that on remand the AOJ should obtain any such evidence to ensure that the record reflects an accurate assessment of the appellant's financial status. Accordingly, the case is REMANDED for the following action: 1. Issue an SOC with regard to the appellant's claim challenging the propriety of the withholding of DIC benefits to recoup a settlement received under the FTCA. The appellant should be notified of the need to timely file a Substantive Appeal to perfect her appeal of this issue. 2. Conduct the necessary development to determine the amount of the FTCA settlement that was awarded to the appellant out of the Veteran's estate. 3. Request that the appellant submit an updated financial status report, to include documentation related to any outstanding unpaid medical bills or any past due bills. 4. After undertaking any other development deemed appropriate, the RO should re-adjudicate the issues on appeal. If the benefit sought is not granted, the appellant and her representative must be furnished with a Supplemental SOC and afforded an opportunity to respond before the record is returned to the Board for further review. The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2012). _________________________________________________ M. N. HYLAND Acting Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2012).