403 F.3d 1324 (Fed. Cir. 2005), 04-7111, Sharp v. Nicholson

Docket Nº:04-7111.
Citation:403 F.3d 1324
Party Name:Pamela J. SHARP, Claimant-Appellant, v. R. James NICHOLSON, Secretary of Veterans Affairs, Respondent-Appellee.
Case Date:April 07, 2005
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 1324

403 F.3d 1324 (Fed. Cir. 2005)

Pamela J. SHARP, Claimant-Appellant,

v.

R. James NICHOLSON, Secretary of Veterans Affairs, Respondent-Appellee.

No. 04-7111.

United States Court of Appeals, Federal Circuit.

April 7, 2005

Sandra E. Booth, of Columbus, Ohio, argued for claimant-appellant.

Lisa B. Donis, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent-appellee. With her on the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; and Harold D. Lester, Jr., Assistant Director. Of counsel on the brief were Richard J. Hipolit, Acting Assistant General Counsel; and Jamie L. Mueller, Attorney, United States Department of Veterans Affairs, of Washington, DC. Of counsel were David B. Stinson and Timothy P. Mcllmail, Trial Attorneys, Commercial Litigation Branch, Civil Division, United States Department of Justice.

Before LOURIE, SCHALL, and PROST, Circuit Judges.

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LOURIE, Circuit Judge.

DECISION

Pamela J. Sharp appeals from the decision of the United States Court of Appeals for Veterans Claims (the "Veterans Court") affirming the Board of Veterans' Appeals' denial of her claim for accrued benefits. Sharp v. Principi, 17 Vet.App. 431 (2004) (" Decision "). Because the Veterans Court correctly interpreted 38 U.S.C. § 1115 as entitling only a veteran and not his or her survivors to dependents' benefits, we affirm that part of the decision. However, pursuant to our recent decision in Terry v. Principi, 367 F.3d 1291 (Fed.Cir.2004), in which we held that the limit of recovery of a veteran's accrued benefits to a maximum two-year period of benefits under 38 U.S.C. § 5121(a) applies to benefits accrued at any two-year period of time, not only to the last two years of the veteran's life, we vacate the portion of the court's decision with respect to the claim for accrued benefits and remand for further proceedings.

BACKGROUND

Ms. Sharp's late husband, James S. Sharp, was a veteran who served from 1968 to 1971. Although he suffered from a disabling hip condition as a result of combat injuries, the Department of Veterans Affairs ("VA") denied his original claim for service connection. In November 1988, he submitted new medical evidence to a VA Regional Office ("RO") to reopen his claim for benefits. Upon reconsideration, the RO did reopen the claim in 1995; it assigned a disability rating of sixty percent, effective November 1988, and a rating of one hundred percent, effective March 1994.

In December 1995, the RO requested that James Sharp submit additional forms to determine whether he was eligible to receive dependents' benefits. He provided the appropriate information, and in December 1996, the RO notified James Sharp that he was indeed entitled to additional benefits for his spouse and child. However, the RO granted an effective date of January 1997 for those benefits, a determination with which James Sharp disagreed. He thus filed an administrative appeal, arguing that the effective date for his dependents' benefits should have been November 1988. In December 1999, James Sharp died while the appeal was still pending.

In January 2000, appellant Pamela Sharp (hereinafter "Sharp") filed a claim for additional accrued compensation based on the fact that her husband had a dependent wife and minor children. The RO denied her claim, and she appealed to the Board of Veterans' Appeals. In July 2001, the Board issued a decision that also rejected her claim. The Board determined that the dependents had no standing on their own to bring a claim for increased dependency allowance. Additionally, the Board found that the dependents' benefits were accrued benefits under § 5121(a) and that payments had been timely paid for each month in the two years immediately prior to the veteran's death. Accordingly, the Board denied Sharp's claim for additional benefits.

Sharp appealed to the Veterans Court, arguing that 38 U.S.C. § 1115 grants dependents of veterans a property interest in the veterans' benefits. That property interest, she asserted, is outside the scope of § 5121(a) accrued benefits and is not extinguished by a veteran's death. Additionally, Sharp asserted that, even if § 1115

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benefits were exclusively committed to the veteran and not dependents, the VA was still liable under § 5121(a) for two years' worth of § 1115 benefits that were due and unpaid at the time of the veteran's death, but not necessarily limited to the two-year period prior to the death.

The Veterans Court rejected Sharp's arguments, holding that dependents do not have a property interest in § 1115 benefits because those...

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