Dent v. McDonald, 2015


MOORMAN, Judge, filed the opinion of the Court.  BARTLEY, Judge, filed a separate opinion concurring in part and dissenting in part.

MOORMAN, Judge: Veteran Preston Lee Dent appeals through counsel an April 30, 2013, Board of Veterans' Appeals (Board) decision concluding that a debt for overpayment of non-service connected pension benefits was properly created.  Record (R.) at 3-10.  This appeal is timely and 1 the Court has jurisdiction to review the Board's decision pursuant to 38 U.S.C. § 7252(a).  This case was submitted to a panel to address the applicable statutory provisions of 38 U.S.C. § 5112(b), prescribing the effective dates VA is to apply to reduction and discontinuance of monetary benefits.
In so doing, we hold that (1) "award" in 38 U.S.C. § 5112(b)(9) and (10) includes "payments of awards," such as the payment of a running award of pension as in this case; and (2) the 2 "beneficiary's knowledge," 38 U.S.C. § 5112(b)(9), and "administrative error or error in judgment," 38 U.S.C. § 5112(b)(10), are factors to be considered in determining the validity of a debt where, subsequent to the initial award of VA pension benefits, a beneficiary experiences a "change in income," 38 U.S.C. § 5112(b)(4)(A).  Accordingly, the Court holds that, in determining whether an erroneous payment resulted in a valid debt in circumstances involving a running award, VA must consider, when the issue is raised, whether the continued payment of the running award was based on VA "administrative error or error in judgment."  The Court further holds that the Board did not err in finding that the continued payment of the pension award in this case was not based "solely on administrative error or error of judgment" and that Mr. Dent had knowledge of the erroneous continued payments.  Accordingly, the Court will affirm the portion of the April 30, 2013, Board decision finding that the overpayment debt against Mr. Dent was validly created.  The Court will remand the matter of the proper amount of that debt, in addition to the assignment of an appropriate effective date for the reduction and discontinuance of the pension award, with the instruction that the Board further remand that issue to the appropriate VA regional office (RO) for issuance of a Statement of the Case (SOC).

Contrary to the majority's assertion, I am not insensitive to the Secretary's fiduciary duty to protect the public fisc.  See ante note 16.  Rather, I believe that acknowledging as administrative error delay and failure to communicate with veterans, such as Mr. Dent experienced, ultimately lowers the cost of pension overpayments to taxpayers and is consistent with the law in that veterans who comply with VA rules and promptly notify VA of income changes would not be adversely affected.  VA would have an incentive to promptly adjust running pension awards after being timely notified of income changes, eliminating or at least minimizing the amount of an overpayment. Significantly, between March 2011 and March 2012, VA's failure to timely process income-change notifications from veterans and beneficiaries resulted in at least $94 million of pension overpayments–a portion of which is ultimately irrecoverable, see 2008 GAO REPORT at 20 (referencing the burden of recovering overpayments from a low-income population)–plus the attendant costs of debt collection and litigation.  See 2013 PENSION AUDIT at 3-4.  Moreover, VA has already made the policy decision to assume the cost of pension overpayments that are not the result of beneficiary fault or made with the beneficiary's knowledge, thereby opting to pass that cost on to taxpayers.  See G.C. Prec. 2-90. In sum, the Board conceded that VA failed to respond reasonably promptly to Mr. Dent's January 2009 letter or update his income information, even though he took "appropriate action" to timely notify VA of his December 2008 award of SSA benefits. R. at 9. Given that the erroneous award of pension benefits between January 2009 and April 2009 was not based on an act of commission or omission by Mr. Dent or with his knowledge, any and all fault for the consequent payment of pension benefits at the unadjusted rate during that period must be ascribed to VA, compelling a finding of sole administrative error.  The majority's holding to the contrary does not comply with the law, frustrates the purpose of the VA pension program, contravenes VA's liberal policy of assuming fault for erroneous payments in questionable cases, and unjustly imposes retroactive responsibilities on Mr. Dent that were not previously communicated to him.  Therefore, I must respectfully dissent from the majority's conclusion that a debt was validly created between January 2009 and April 2009.

  • Attachment(s): PDF
  • Organization: CAVC
  • Date Created: December 01, 2016
  • Last Updated: December 07, 2016
  • U.S. Court of Appeals for Veterans Claims Appeal