Burkhart: DIC, 38 U.S.C. § 1151, & VA home loan guaranty

Burkhart v. Wilkiedocket no. 16-1334 (Jan. 3, 2019)

HELD: Surviving spouse of veteran whose death was service connected under 38 U.S.C. § 1151 and who is thus entitled to DIC benefits is not entitled to home loan guaranty benefits under Ch. 37. 

SUMMARY: Surviving spouse was granted dependency and indemnity compensation (DIC) after her husband’s death was deemed service connected under 38 U.S.C. § 1151. She sought and obtained a certificate of eligibility (COE) for a VA home loan in 2007, but never entered into a loan agreement. In 2013, she again requested an eligibility determination for a loan guaranty and was informed that she was not eligible and that the 2007 COE was issue in error. 

On appeal, the Court reviewed the relevant statutory provisions and determined that she was not eligible under the plain language or the legislative history of 38 U.S.C. § 1151 or Ch. 37. The Court also determined that the “incontestability” provision of 38 U.S.C. § 3721 applies to the relationship between the government and lending institutions – not between the government and those who are eligible for a loan guaranty. Finally, the Court addressed the appellant’s arguments regarding the Court’s ability to provide relief based on its equitable powers. The Court acknowledged that while it has equitable authority, “that authority is constrained by the jurisdiction Congress conferred on the Court.” The Court discussed the four equitable principles argued by the appellant – injunctive relief, equitable estoppel, laches, and waiver – and determined that none were available in this case as a form of relief. 



Patricio v. Shulkin, 29 Vet.App. 38 (Aug. 31, 2017)

HELD: A surviving spouse can challenge VA’s denial of status as a surviving spouse for DIC purposes – even where there is a prior determination that the marriage was not valid for purposes of adding the spouse to the veteran’s benefit during the veteran’s lifetime. The surviving spouse does not have to challenge that earlier decision on the basis of CUE in order to appeal the DIC denial. In fact, the surviving spouse would lack standing to bring such a challenge since the spouse was not the “claimant” in the earlier decision. (The veteran was.)

SUMMARY: This case involves the validity of a marriage for DIC purposes. The veteran, Antonio Patricio, was married to his first wife, Susan, in the Philippines in 1968. They had a daughter in 1970, and her birth certificate lists the veteran’s nationality as American. In 1973, a California court entered final judgment on a divorce decree.

In 1980, the veteran married the appellant in this case, Corazon, in Seoul, Korea. They had a son in 1982, and his birth certificate indicates that the veteran was naturalized as a U.S. citizen in 1973.

In 1986, the veteran filed a Status of Dependents form, seeking additional benefits for his children from both marriages. The RO sought a legal opinion from VA’s district counsel regarding whether the 1973 California divorce legally terminated the veteran’s marriage and, thus, whether Ms. Patricio could be recognized as his wife for the purpose of being added to his award as a dependent. The opinion held that because the veteran lived in the Philippines during and following service, Philippine law governed – and that law does not recognize foreign divorces by its citizens. The RO denied the claim for additional dependents’ benefits and the veteran filed a Notice of Disagreement, but did not perfect his appeal to the Board.

The record also contains a 1989 birth certificate that lists the veteran and a third woman as the child’s parents, with both of their nationalities listed as American. The birth certificate indicates they were married in 1976 in California.

In 1989, the veteran and Ms. Patricio moved to Florida. The veteran died in Texas in 2009. Prior to his death, he had been granted service connection for various disabilities, and was paid as a single veteran with no dependents.

In August 2009, the first wife (Susan) filed a claim for dependency and indemnity compensation (DIC). Two months later, the appellant filed a claim for DIC. In 2011, the RO granted DIC to Susan, and denied the appellant’s claim. Ms. Patricio appealed.

In September 2015, the Board denied Ms. Patricio recognition as the veteran’s surviving spouse because Philippine law would not recognize the 1973 divorce from his first wife, Susan. The Board also determined that Ms. Patricio’s marriage could not be “deemed valid” because DIC benefits had already been granted to Susan.

On appeal to the CAVC, Ms. Patricio argued for reversal under the Constitution’s Full Faith and Credit Clause, asserting that the Court and VA must recognize the validity of the 1973 California divorce decree. The Secretary urged the Court to dismiss the appeal for lack of jurisdiction because Ms. Patricio had not properly filed a motion to revise the 1986 decision on the basis of clear and unmistakable error (CUE). Alternatively, the Secretary argued that the Court should remand the case for the Board to determine the veteran’s citizenship in 1973, when he and Susan divorced.

The Court rejected the Secretary’s argument to dismiss because Ms. Patricio had appealed the RO’s decision that determined that the veteran’s first wife, Susan, was his surviving spouse for VA benefits purposes. This was the subject of the Board decision – and the Court clearly has jurisdiction over final Board decisions. The Court noted that Ms. Patricio was not challenging the 1986 decision that denied the veteran additional compensation based on dependents. In fact, the Court noted that she could not file a CUE motion with that decision – since a CUE challenge can only be initiated by the Secretary or the claimant – and she was not the claimant in that decision. See Rusick v. Gibson, 760 F.3d 1342, 1345-46 (Fed. Cir. 2014) (stating that a veteran’s survivor lacks standing to raise a CUE challenge to a decision pertaining to the veteran’s benefits).

The Court further noted that VA decides survivors’ claims “without regard to any prior disposition of those issues during the veteran’s lifetime,” citing 38 C.F.R. § 20.1106, so the 1986 dependency decision is irrelevant to Ms. Patricio’s DIC claim.

The Court determined that remand was the appropriate remedy, since there were factual issues that the Board did not address – specifically, the veteran’s citizenship at the time of the 1973 California divorce. If he was a naturalized citizen at that time, then U.S. law would govern the issue of surviving spouse status and the California divorce would be valid. If he was a citizen of the Philippines, however, that country’s law would govern – and the 1973 divorce would not be recognized. Because the Board did not make any findings with respect to the veteran’s nationality at the time of the 1973 divorce, the Court determined that remand was necessary for the Board to address this issue.

The Court declined to address Ms. Patricio’s Full Faith and Credit argument, but noted that even if it did address this argument, it might not necessarily result in an award of benefits – since the record contains evidence of a marriage to a third woman that occurred prior to the appellant’s marriage to the veteran. So, even if the divorce from Susan was valid for surviving spouse purposes, it is unclear if and/or how the marriage to the third was terminated. Because the Court cannot make factual findings in the first instance, it remanded the appeal for the Board to address these questions.