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Friday, May 31, 2024

Frazier: Substituted Parties and Limitations on What Can be Received

Frazier v. McDonough, Case Number 22-4670, decided May 23, 2024 is a decision by the Veterans Court discussing substitution of an adult child related to the veteran’s claims for specially adapted housing (SAH) or special home adaption grant (SHA) and automobile adaptive benefits.

The adult child was substituted into the claim after the veteran died, but the Board dismissed the appeals concerning claims for SAH, SHA and automobile benefits because a claimant is eligible for substitution only for claims for periodic monetary benefits, and not for claims for personal benefits administered through the Veterans Health Administration."  The Board concluded it lacked jurisdiction over those claims as a result of the veteran's death.  Id. at *1-2.

The adult child appealed arguing “that as a qualified accrued benefits recipient under 38 U.S.C. § 5121(a), she is permitted to be substituted to continue the appeal of the veteran's claim under 38 U.S.C. § 5121A for "any benefit," which includes any non-accrued (or non-periodic) benefits like SAH or SHA or for automobile adaptive equipment. And to the extent the regulation the Board cited, 38 C.F.R. § 3.1010(a), provides otherwise, appellant argues that it is invalid.”  Id. at *2.

The Court concluded: “under section 5121A (with our emphasis added), an eligible accrued benefits recipient may request substitution "[i]f a claimant dies while a claim for any benefit under a law administered by the Secretary, . . . is pending[.]" Congress provided no restriction on the type of benefit at issue, other than it is one the Secretary administers. Restricting substitution requests for an eligible accrued benefits recipient to only those cases involving a "claim for periodic monetary benefits," as the Secretary urges, inappropriately imposes a limitation Congress did not. Therefore, we hold that section 5121A unambiguously provides that an eligible accrued benefits recipient can be substituted in a claim for any benefit, including non-accrued benefits. But that is not without limitation. We also hold that an accrued benefits recipient under section 5121(a)(6) is limited to reimbursement for last expenses of sickness and burial and nothing more, even if substituted under section 5121A. And, to the extent the Secretary's implementing regulation, § 3.1010(a), provides otherwise, it is unlawful and we invalidate it. Because the Board clearly erred when it dismissed the veteran's claims for SAH or SHA and automobile adaptive benefits, we will reverse that portion of the Board's decision. We will then remand those matters for the Board to adjudicate the merits of the veteran's claims for SAH, SHA, and automobile adaptive benefits, with appellant as the substituted claimant.”  Id. at *1-2.

Importantly, for substituted parties, the question of what can be gained by a substituted party has been answered by the Court.  It states that “Section 5121(a)(6) allows payment of accrued benefits but "only so much of the accrued benefits may be paid as may be necessary to reimburse the person who bore the expense of last sickness and burial."75 The language plainly places a cap on the amount that an accrued benefits recipient could receive if they are only eligible on the basis of the one who "bore the expense of last sickness and burial."76 The question is whether the limitation set forth in § 5121(a)(6) applies when a person in that category is pursuing a substitution claim under section 5121A.”  Id. at *16-17.

The Court concluded this discussion of the cap by stating: “So, we read section 5121A to require that a person who is allowed to substitute on the grounds that they bore the expense of a veteran's last sickness and burial is limited by the amount of such expense when allowed to substitute into a deceased veteran's claim.”  Id. at *18.

Decision by Judge Allen and joined by Chief Judge Bartley and Judge Jaquith. 

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