Phillips v. Shinseki
| Decision Date | 25 September 2009 |
| Docket Number | No. 2008-7124.,No. 2008-7142.,2008-7124.,2008-7142. |
| Citation | 581 F.3d 1358 |
| Parties | Donald PHILLIPS, Claimant, and Dejuanna Harris, Movant-Appellant, v. Eric K. SHINSEKI, Secretary of Veterans Affairs, Respondent-Appellee. Nathan J. Davis, Claimant-Appellant, and Valerie Stanback, Movant-Appellant, v. Eric K. Shinseki, Secretary of Veterans Affairs, Respondent-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Eric Alan Shumsky, Sidley Austin LLP, of Washington, DC, argued for all appellants. With him on the briefs were Pankaj Venugopal and Naomi Schoenbaum. Of counsel on the briefs was Barton F. Stichman, National Veterans Legal Services Program, of Washington, DC. Of counsel on the brief in 2008-7124 was Richard V. Spataro. Of counsel on the brief in 2008-7142 were Christine M. Cote and Louis J. George.
Meredyth Cohen Havasy, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for respondent-appellee in appeals 2008-7124 and 2008-7142. With her on the briefs were Jeanne E. Davidson, Director, and Martin F. Hockey, Jr., Assistant Director. Of counsel on the briefs was Michael J. Timinski, Deputy Assistant General Counsel, United States Department of Veterans Affairs, Office of the General Counsel, of Washington, DC. Of counsel on the brief in 2008-7124 was Martin J. Sendek, Attorney. Of counsel on the brief in 2008-7142 and of counsel in 2008-7124 was Michael G. Daugherty, Attorney.
Before MICHEL, Chief Judge, BRYSON, Circuit Judge, and SPENCER, Chief District Judge.*
These two appeals raise questions about the procedures that apply when a veteran who is pursuing a claim for disability benefits dies while his claim is pending. In both cases, the veteran-claimant died while his claim was on appeal before the Court of Appeals for Veterans Claims ("the Veterans Court"). In both cases, the question before us is whether the daughters of the deceased veteran-claimants may be substituted for their fathers so that they can pursue either an "accrued-benefits claim" under 38 U.S.C. § 5121 or a claim for attorney fees under the Equal Access to Justice Act ("EAJA"), 28 U.S.C. § 2412. In both cases, the Veterans Court refused to permit substitution, dismissed the veterans' appeals, and denied the EAJA claims.
Nathan Davis, a United States Army veteran, filed a claim in 1997 seeking service connection for post-traumatic stress disorder. After multiple proceedings before a regional office of the Department of Veterans Affairs ("DVA") and the Board of Veterans' Appeals, the Board ultimately denied his claim in 2005. When Mr. Davis appealed to the Veterans Court, the Secretary of Veterans Affairs conceded that the Board's decision was erroneous in two respects. First, the Secretary conceded that the Board had failed to ensure that the regional office complied with an earlier remand order from the Board. In that order, the Board had directed the regional office to attempt to verify information provided by Mr. Davis as to an in-service stressor. Second, the Secretary conceded that the Board had mistakenly relied on a June 2004 medical examination that was inadequate for rating purposes.
On December 7, 2006, the Veterans Court issued an opinion vacating the Board's decision and remanding the case to the Board for further adjudication. The court agreed with the two points on which the Secretary confessed error. With respect to the first point, the court agreed that the regional office had not sought to verify Mr. Davis's allegations as the Board had directed it to do. With respect to the second point, the court agreed that the medical examiner had erred in concluding that Mr. Davis had never been formally diagnosed with post-traumatic stress disorder and that the examiner had failed to address several of Mr. Davis's alleged stressors. The court issued its judgment on January 3, 2007, and the court's mandate issued on March 9, 2007. Three months later, on April 3, 2007, counsel for Mr. Davis filed an EAJA application for attorney fees and expenses.
Before the court acted on the EAJA application, Mr. Davis's counsel learned that Mr. Davis had died on January 10, 2007, a week after the court entered its judgment in the case. Counsel informed the court of Mr. Davis's death on April 20, 2007, and moved to substitute Mr. Davis's daughter, Valerie Stanback, as the claimant for purposes of pursuing the EAJA claim. At that time, Ms. Stanback stated that there was no person eligible to make a claim for accrued benefits under 38 U.S.C. § 5121. She argued, however, that the EAJA claim could proceed in her name because the Veterans Court's remand order was a final judgment for purposes of EAJA.
The Secretary opposed both the motion to substitute and the EAJA application. The Secretary asked the Veterans Court to withdraw its judgment and mandate, to vacate the Board's decision, and to dismiss the appeal. In her reply to the Secretary's motion, Ms. Stanback asserted that, in addition to being a proper person to pursue the EAJA claim, she was eligible for accrued benefits under 38 U.S.C. § 5121(a)(6) as the person who bore Mr. Davis's funeral expenses. For that reason, she asserted that she was entitled to substitution as an accrued-benefits claimant under this court's decision in Padgett v. Nicholson, 473 F.3d 1364 (Fed.Cir.2007).
The Veterans Court granted the Secretary's motion and entered an order withdrawing its judgment and mandate, vacating the Board's decision, and dismissing the appeal. The court stated that because it had vacated the Board's decision, the Board's decision and the underlying regional office decision would have no preclusive effect on the adjudication of any future accrued-benefits claim based on Mr. Davis's entitlements. With respect to the EAJA claim, the court held that in order to be eligible for EAJA fees, an appellant must be a "prevailing party," and that upon the recall of the court's judgment, there was no longer any decision as to which the appellant could be said to be a prevailing party. The court therefore dismissed the EAJA claim.
In 1992, Army veteran Donald Phillips filed an application for disability compensation based on a psychiatric disorder. Over an extended period of time, he unsuccessfully attempted to obtain service connection for his disability. The Board of Veterans' Appeals ultimately denied his claim in May 2005. After Mr. Phillips appealed to the Veterans Court, the Secretary agreed to a joint motion for remand. Accordingly, on November 28, 2006, the parties filed a "Joint Motion for an Order Vacating and Remanding the Board Decision and Incorporating the Terms of this Remand." In the joint motion, the Secretary conceded that the Board had failed to address the significance of evidence potentially favorable to Mr. Phillips's claim. The Veterans Court granted the joint motion to remand on December 7, 2006, in an order that also served as the court's mandate.
Unbeknownst to counsel, Mr. Phillips had died on November 30, 2006, two days after the joint remand motion was filed. After learning of Mr. Phillips's death, his attorney notified the court on January 4, 2007, that Mr. Phillips had died. Counsel then filed an application for attorney fees under EAJA, and Dejuanna Harris, Mr. Phillips's daughter and the representative of his estate, filed a motion seeking to be substituted as the claimant for purposes of pursuing the attorney fee award.
The Veterans Court denied the motion for substitution and instead issued a decision recalling its judgment and mandate. The court also vacated the underlying Board decision and dismissed the appeal. Because the court's actions meant that there was no longer a final judgment upon which to base an EAJA award, the court dismissed the EAJA application.
As a general rule, a veteran's claim for disability benefits terminates with the death of the veteran. Richard v. West, 161 F.3d 719, 723 (Fed.Cir.1998). Consequently, when a veteran-claimant dies during the pendency of proceedings on his claim, including an appeal to the Veterans Court, no other party is automatically entitled to be substituted on the veteran's claim for benefits. By statute, however, certain successors acquire an interest in the veteran's benefits. In particular, the benefits that accrued during the veteran's last two years and were "due and unpaid" at the time of the veteran's death are referred to as "accrued benefits" and can be claimed by a person who qualifies as a beneficiary under 38 U.S.C. § 5121(a). The statute defines the qualifying benefits as those "to which [the veteran] was entitled at death under existing ratings or decisions or those based on evidence in the file at date of death." Id. Thus, the statute "provides a mechanism for survivors to recover certain benefits the entitlement to which has already been established or can be readily established based on evidence in the file at the date of the veteran's death." Haines v. West, 154 F.3d 1298, 1300-01 (Fed.Cir.1998). An accrued-benefits claimant may pursue the accrued benefits by filing his or her own claim, which is distinct and separate from the underlying veteran's benefit claim. In certain circumstances, however, we have held that an accrued-benefits claimant may be substituted for the deceased veteran claimant on the disability benefits claim in order to protect the accrued-benefits claimant's legal interests.1
When a veteran-claimant dies during the pendency of his appeal to the Veterans Court, the court normally does not allow substitution of an accrued-benefits claimant for the deceased claimant, but instead vacates the Board decision from which the appeal is taken and dismisses the appeal. In Landicho v. Brown, 7 Vet.App. 42, 54 (1994), the court explained that doing so ensures that the Board decision "will have no preclusive effect in the adjudication of any future...
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