Citation Nr: 22017285 Decision Date: 03/24/22 Archive Date: 03/24/22 DOCKET NO. 17-55 431 DATE: March 24, 2022 REMANDED Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $19,650.64, to include the question of whether the overpayment was properly created, is remanded. REASONS FOR REMAND The Veteran served on active duty from July 1954 to May 1956 and died in December 2007. The current appeal is perfected by the Appellant as his surviving spouse This matter comes before the Board of Veterans' Appeals (Board) on appeal from an August 2014 decision issued by the Department of Veterans Affairs (VA) Regional Office (RO). The Appellant failed to report for a requested Board hearing in January 2022 and has not shown good cause. Her hearing request is deemed withdrawn. 38 C.F.R. §§ 20.702, 20.704(d). Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $19,650.64, to include the question of whether the overpayment was properly created, is remanded. In this case, the Appellant, the surviving spouse of a Veteran who died in December 2007, has challenged the proper creation of the debt. As such, further appellate review by the Board on the Appellant's request for waiver must be deferred pending formal adjudication of her challenge to the validity of the debt. Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991) ("when a claimant raises the validity of the debt as part of a waiver application...it is arbitrary and capricious and an abuse of discretion to adjudicate the waiver application without first deciding a veteran's challenge to the lawfulness of the debt asserted against him or her"); VAOPGCPREC 6-98 (July 24, 1998) (holding that when a veteran challenges the validity of the debt and seeks waiver of the debt, the [Regional Office] must first fully review the debt's validity and, if the office believes the debt to be valid, prepare a written decision fully justifying the validity of the debt before referring the waiver request to the Committee on Waivers and Compromises). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. 38 C.F.R. § 1.911(c)(1). Resolution of the creation issue must precede consideration of the waiver issue. In that consideration of the propriety of the creation, for a determination that the overpayment was not properly created such that the debt was not valid, it must be established that the Appellant was either legally entitled to the benefits in question or, if the Appellant was not legally entitled, then it must be shown that VA was solely responsible for the Veteran being erroneously paid benefits. Administrative errors include all administrative decisions of entitlement, whether based upon mistake of fact, misunderstanding of controlling regulations or instructions, or misapplication of law. VAOPGCPREC 2-90 (July 17, 1989); 55 Fed. Reg. 27757 (1990). Sole administrative error connotes that the Appellant neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Appellant's actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C. § 5112(b)(9), (10); 38 C.F.R. § 3.500(b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997) (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. The United States Court of Appeals for Veterans Claims noted that, "[s]tated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award." Erickson v. West, 13 Vet. App. 495, 499 (2000). Here, the Veteran began receiving VA compensation benefits, effective August 23, 1956. VA continued to pay the Veteran's benefits to the Appellant after the Veteran died in December 2007. In July 2014, VA discovered that the Veteran had died and retroactively terminated the payments issued since 2007, which resulted in this overpayment. The Appellant contends that VA was informed of the Veteran's death, and it was sole VA administrative error that they continued to pay her. Specifically, she contends that she applied for a burial flag and "VA memorial" for the Veteran at the time of his death and thus, VA was aware of his death. See November 2014 notice of disagreement. However, these documents are not associated with the file, but it appears that the Veteran's claims file is incomplete, as a May 2016 VA memorandum indicated that his claims folder was not locatable; however, not all of the administrative procedures pertaining to attempts to locate a claims file were completely followed. As such, a remand is warranted to attempt to locate or rebuild the lost claims folder, adjudicate whether the overpayment was properly created, and then transfer the Appellant's request for a waiver of overpayment, if any, to the appropriate AOJ. As this matter is remanded for further development, the Appellant is invited to submit the appropriate documents indicating that VA was notified at the time of the Veteran's death. The matter is REMANDED for the following actions: 1. The RO should take appropriate action to locate the applications discussed by the Appellant that are missing from the Veteran's claims file, to include the request for a burial flag and for a "VA memorial." Document all requests for information, as well as all responses in the claims file. 2. The RO should attempt to locate the missing claims folder and take all appropriate actions to rebuild the claims file folder, to include emailing the Veterans Service Center Manager of any RO where there is reason to believe the folder may be located. If the RO is unable to locate the missing claims folder or determines the claims folder is not missing and the May 2016 VA memorandum is issued in error, then this should be clearly documented, and an explanation provided to reconcile the issuance of the memorandum. 3. After the above development has been completed, then readjudicate the issue of whether the overpayment was properly created, to include the raised matter of sole administrative error. The contentions of the Appellant regarding VA's knowledge of the Appellant's debt should be addressed. 4. Should an overpayment of VA compensation benefits remain, then forward the Appellant's request for a waiver to the Committee on Waivers and Compromises to adjudicate the issue of waiver of recovery of an overpayment of VA compensation benefits. Cory M. Picton Veterans Law Judge Board of Veterans' Appeals Attorney for the Board M. Tang, Counsel The Board's decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.