The Court of Appeals for Veterans Claims issued a ruling clarifying VA's regulations for accrued benefits claims.: Photo by Flickr user s_falkow.

The Court of Appeals for Veterans Claims (Court) started off the new year by interpreting the law and regulations concerning an attempt to reopen a VA claim for accrued benefits.

What are Accrued Benefits?

If a Veteran dies while their claim is still pending before the Department of Veterans Affairs, the Veteran’s spouse (or another family member, as allowed by the law) can apply for accrued benefits, or money owed to a Veteran by the VA that was unpaid at the time of the Veteran’s death.  See 38 U.S.C. § 5121 (c).

The law clearly indicates that an initial claim for accrued benefits must be filed within a year of the Veteran’s death. Until last Thursday, the regulations were less clear about reopening a previously-denied accrued benefits claim.

In Quattlebaum v. Shinseki, the Court clarified whether that year deadline also applied to attempts to reopen an accrued benefits claim.

Is an Accrued Benefits Claim fundamentally Different From a Disability Claim?

When a Veteran wants to reopen a closed disability claim (when the year appeals period has expired), they must submit new and material evidence in order to reopen the claim.  See 38 U.S.C. § 5108; 38 C.F.R. § 3.156.  According to VA’s argument in Quattlebaum, accrued benefits claims were fundamentally different from other VA claims.

VA argued that because the law, and in turn the regulations, impose a time limit on filing the initial accrued benefits claim, it is not possible to reopen a denied accrued benefits claim more than a year after the Veteran’s death.

VA further argued that because an accrued benefits claim is based on the evidence ‘in the file at the time of death,’ such evidence could not then also be considered the ‘new and material’ evidence required to reopen a claim.  This argument would guarantee that all finally denied accrued benefits claims could never be reopened, but would require a survivor to file for a revision of the denial based on clear and unmistakable error (CUE).

Court Disputes VA’s Interpretation

The Court disagreed with VA’s reading of the law stating, “On its face, section 5121 in no way indicates a preclusion of reopening accrued benefits claims. Similarly, section 5108 on its face allows the reopening of any previously disallowed claim. Read together, an accrued benefits claim must be filed within one year after the veteran’s date of death . . . and an accrued benefits claim can be reopened upon the presenting of new and material evidence.”

This ruling makes it clear that when it comes to reopening a denied claim, there is no difference between one for accrued benefits and any disability claim a Veteran files.

While the Court did state that finding new and material evidence on an accrued benefits claim could be difficult, it also admitted that there have been instances when documents were in the VA’s possession, but weren’t considered when the Veteran’s claim was originally decided, thus making them new and material.

It is important to remember that the Court ruling does not affect the initial year filing deadline. In order for an accrued benefits claim to even be considered, the beneficiary must file within this time period.

You can find the full decision at :

http://www.veteranslawlibrary.com/files/CAVC_cases/2012/Quattlebaum_09-3557.pdf

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An 11-judge panel will reconsider the appeal by the non-profit.

In his dissenting opinion of the original ruling, Chief Judge Alex Kozinski stated that the majority “tramples over the strict jurisdictional limits” on judicial review of decisions by the Department of Veterans Affairs.

“Much as VA’s failure to meet the needs of veterans with PTSD might shock and outrage us, we may not step in and boss it around,” Kozinski wrote.

The lawsuit’s claims were initially denied by a district court judge in San Francisco because the court did not have the authority to rule on VA benefits decisions.

Veteran James Riley left his job when symptoms of multiple sclerosis (MS) made it impossible for him to work. Sun Life and Health Insurance Co., which provided the long-term disability plan for Riley’s employer, began paying Riley benefits in January 2005. Riley had also been awarded service connection for MS by the Department of Veterans Affairs.

When the insurance company learned of the VA benefits, it reduced the amount it was paying Riley and claimed he owed nearly $21,000 in overpayments.

The Sun Life long-term insurance plan provided that the monthly disability payments it made could be reduced by “other income” received by the disabled person.

“Other income” was defined in the plan as any amount of disability or retirement benefits under the U.S. Social Security Act, the Railroad Retirement Act or “any other similar act or law provided in any jurisdiction.”

Riley objected and eventually sued Sun Life. A federal court in Omaha ruled in favor of Sun Life last year, but Mr. Riley appealed to the Court of Appeals.

The Eighth Circuit Court said the Veterans Benefits Act is different from the Social Security and Railroad Retirement acts. The court opinion indicated that “[t]he SSA and RRA disability benefits programs are both federal insurance programs based upon employment, and the amount of an award under their terms depends upon how much has been paid in.” The Court found that VA benefits were “not from an ‘insurance’ program, but instead are considered obligatory compensation for injuries to service men and women during military duty.”

While this case was a “win” for the Veteran, it does not mean that long term insurance benefits could never be offset by the amount of VA payments.  The Court’s opinion noted that “VA benefits may not always be entitled to protection simply by virtue of their status as veterans’ benefits.” The case was decided based upon the particular language of this long-term insurance plan.

In Munro, the veteran argued that the implicit denial rule could not appeal to informal claims.  However, the Fed. Cir. held that the rule can be applied to end any pending claim whether formal or informal.  In determining whether the implicit denial rule should apply to Munro, the Fed. Cir. relied heavily on its prior consideration of the rule, particularly in Deshotel v. Nicholson, 457 F.3d 1258 (Fed. Cir. 2006).  In Deshotel, the Fed. Cir. held that where a veteran files closely related claims and VA explicitly denies only one of these claims, the implicit denial rule should be applied to treat the other closely-related claims as also denied.  The Fed. Cir. also reviewed other cases to conclude that the implicit denial rule requires that the denial of a claim will end the pending status of any other identical pending claims.  The Fed. Cir. found that Mr. Munro’s informal claims were identical to the formal claim that VA later denied, so the implicit denial rule applied here and his informal claims were deemed to be denied.  It also found that from the specifics in VA’s denial, Mr. Munro should have known that his informal claim was also being denied, as the documents he submitted as the informal claims were referenced in the decision. 

The documents Mr. Munro asserted were informal claims consisted of VA medical records.  The Fed. Cir. noted that veterans with service-connected conditions routinely visit VA medical centers and for VA to treat each medical record as an individual claim would be unnecessary and unreasonable. 

While the Munro decision was not favorable to the veteran, it can provide some guidance for others.  First, be as specific as possible when submitting a claim to VA.  Rather than just sending in some medical records and later trying to sort out the nature of the claim, explain your claim and what the records show upfront.  (For instance, stating something like, “This is my informal claim for an increased rating for my service-connected PTSD.  The attached VA treatment records show that my condition has become more severe.”). 

Also, if you receive a denial from VA that you do not agree with or understand, let them know about it immediately.  Mr. Munro faced additional burdens because he did not timely appeal denials and they became final decisions.  If you are not satisfied with your decision from VA, keep appealing and keep the claim alive.

The issue that the Supreme Court will consider is whether the statutory 120-day time limit for filing a notice of appeal (“NOA”) (found at 38 U.S.C. § 7266(a)) to the Court of Appeals for Veterans’ Claims (“CAVC”) constitutes a statute of limitations subject to the doctrine of equitable tolling (meaning, exceptions to the filing deadline can be made) or whether the time limit is jurisdictional and does not allow any exceptions. 

While this is a very technical issue, it is extremely important.  It has been estimated that approximately 2 appeals a week are denied because they are too late.  If the time deadline is deemed jurisdictional, it does not matter why the appeal is late.  It could be – as in Mr. Henderson’s case – that the service-connected condition itself prevented a timely appeal.  Or, it could be that the Veteran sent the appeal within 120 days to the BVA or RO rather than to CAVC, and VA held onto the NOA until after the deadline expired.  Regardless of the Supreme Court’s decision, it is highly recommended that if you wish to appeal to CAVC, you submit your appeal within 120 days, if at all possible.

To review the general VA disability claims process, claims are typically decided originally by a Regional Office.  If denied, the claimant (a Veteran or eligible dependent) can appeal to the BVA in Washington, DC.  If denied by the BVA, then the claimant can appeal to the CAVC.  In limited circumstances, a denial by the CAVC can be appealed to the Fed Circuit.  If denied by the Fed Circuit, the claimant can ask the Supreme Court to consider the case.  All of these appeals have time limits and other requirements. 

In Mr. Henderson’s case, the BVA denied entitlement to special monthly compensation in August 2004.  More than 120 days after the BVA decision was mailed to him, his NOA was received in January 2005.   He was ordered to show cause why his appeal should not be dismissed as untimely.  He asked for an extension to file his NOA because his service-connected disability had prevented him from filing it on time.  He provided a letter from a psychiatrist to support this assertion.  In a single-judge decision, the Court dismissed his appeal for lack of jurisdiction.

Mr. Henderson requested that the CAVC’s dismissal be reconsidered, and his request was granted and submitted to a panel of 3 judges.  Meanwhile, the Supreme Court decided Bowles v. Russell which addressed the nature of NOA’s in the Federal appellate courts.  In Bowles, the Supreme Court held that in Federal appellate courts, the filing of a NOA is a jurisdictional requirement – with the effect that the filing deadline is a hard and fast rule – rather than statute a limitations.  If the filing deadline were viewed as a statute of limitations, it would be subject to “equitable tolling” – meaning that exceptions could be made to the filing deadline in certain circumstances.   Mr. Henderson argued to the CAVC that Bowles did not apply to his claim at the CAVC and that a previous Fed Circuit case, Bailey v. West, establishing that equitable tolling was allowed in his situation, was still the precedent to follow.  VA argued that CAVC should follow Bowles and find that the 120-day deadline was now a bright-line rule that could not be excused for any reason.

In 2008, the CAVC found that Bowles applied, that Mr. Henderson’s NOA was untimely, and that his appeal must be dismissed for a lack of jurisdiction.  Notably, one of the 3 judges dissented.    

In 2009, the Fed Circuit, in a panel decision by 12 judges, affirmed the CAVC’s dismissal of Mr. Henderson’s claim for lack of jurisdiction.  The majority of the Fed Circuit panel agreed with CAVC that the time deadline for filing the NOA was a jurisdictional requirement and not subject to equitable tolling.  It overruled its previous decision in Bailey and another similar decision in light of Bowles.  Three judges dissented, noting that Bowles did not discuss much less overrule the Supreme Court’s long line of case affirming equitable tolling and that other circuit courts of appeals had found that equitable tolling survived Bowles in the context of filing deadlines.

Representing herself, Mrs. Davidson appealed to the Federal Circuit, which held that the CAVC’s decision “is in direct conflict with our precedent” that medical evidence is not always required to resolve issues of medical diagnosis or causation.  The court returned the case back to the CAVC for a new decision.  Although Mrs. Davidson may not ultimately persuade the CAVC that her opinion should be considered the equal of the psychiatrist’s, the Court’s decision reinforces that claimants’ statements cannot be gratuitously disregarded just because they do not have medical training.

The facts in Cushman were particularly egregious.  A VA employee apparently altered medical evidence so it would appear less favorable to Mr. Cushman’s claim.  The court held that VA’s continued adjudication of his claim with this tainted piece of evidence in the record deprived him of entitlement to the sought-after benefits without due process of law.  In so doing, it permitted him to overcome the finality of a prior 1980 Board of Veterans’ Appeals decision, and ordered a new hearing of his 1977 claim denied in that decision.  It is through this ability to circumvent the finality of prior adverse decisions where Cushman may have its most significant impact.

The Court of Appeals for Veterans Claims and the Federal Circuit will now have to wrestle with how egregious the VA action or omission must be to rise to the level of a deprivation of due process of law.  In Gambill v. Shinseki, No. 2008-7120 (Fed. Cir. Aug. 13, 2009), for example, the Federal Circuit rejected the veteran’s argument that he was deprived due process of law by not being allowed to serve written interrogatories on the VA physician who prepared an adverse medical opinion.  The court acknowledged Cushman, but declined to address whether due process of law compelled the relief Mr. Gambill sought.  It held that even if such a right existed, VA’s failure to provide it to Mr. Gambill did not prejudice him.  In separate, non-binding opinions, however, one of the panel’s judges explained why she believes due process of law compels providing claimants the opportunity to confront VA physicians who prepare the dispositive medical opinions in their claims, while another explained why he does not.