Lopez v. United States

• Decision Date: 06 April 1936
• Docket Number: No. 3994.,3994.
• Citation: 82 F.2d 982
• Parties: LOPEZ et al. v. UNITED STATES.
• Court: U.S. Court of Appeals — Fourth Circuit

82 F.2d 982 (1936)

LOPEZ et al. v. UNITED STATES.

No. 3994.

Circuit Court of Appeals, Fourth Circuit.

April 6, 1936.

W. B. Rouse, of New Bern, N. C. (W. B. R. Guion, of New Bern, N. C., on the brief), for appellants.

Armistead L. Boothe, Atty., Department of Justice, of Washington, D. C. (Will G. Beardslee, Director, Bureau of War Risk Litigation, of Washington, D. C., Wilbur C. Pickett, Sp. Asst. to Atty. Gen., and James O. Carr, U. S. Atty., of Wilmington, N. C., on the brief), for the United States.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

SOPER, Circuit Judge.

This action upon a contract of war risk insurance was dismissed in the District Court upon the ground that it was not brought within the time specified by the World War Veterans' Act of 1924. The case was heard upon the pleadings and the records of the Veterans' Administration, which show when the claim was presented to the Administration and denied by it.

While serving in the United States Army, David Carnegie, the veteran, obtained war risk term insurance in the sum of $10,000 effective as of July 21, 1918, and designated his mother, Annie Eliza Carnegie, as beneficiary therein. The policy was kept in force by the payment of premiums until February 1, 1919. The insured died November 23, 1921. The original complaint was filed in the District Court on February 4, 1932, by Ester C. Lopez and Bryant T. Carnegie as sister and brother, respectively, of the veteran. They claimed that by operation of law they were the beneficiaries and entitled to the proceeds of the insurance, and they alleged that the veteran was discharged from the army on December 19, 1918, and that at the time of his discharge he was permanently and totally disabled. The beneficiary named in the policy died on February 20, 1926, and Ester C. Lopez was appointed administratrix of her estate on September 21, 1932. Bryant T. Carnegie was appointed administrator of the veteran's estate on February 10, 1925. On September 23, 1932, the original complaint in the District Court was amended so that the administratrix of the estate of the beneficiary and the administrator of the estate of the insured were joined as parties plaintiff. The allegation that the veteran became permanently and totally disabled on or before the date of his discharge was repeated.

A claim for insurance benefits under the policy was first filed by the mother, as beneficiary, with the Veterans' Bureau on January 7, 1924. The claim was denied on May 6, 1924, and on May 26, 1924, the attorney for the plaintiffs in the instant case was notified of such denial. After additional correspondence between the Veterans' Bureau and interested persons, the Central Board of Appeals reviewed the case and in an opinion of December 19, 1924, which was reaffirmed on December 21, 1924, denied the claim.

The claim was again brought to the attention of the Veterans' Administration by letter of February 3, 1931, received on February 5, 1931, from an officer of an American Legion Post at New Bern, N. C., in which it was requested that the case be forwarded to the Central Board of Appeals on the evidence on file. The letter stated that this evidence sufficed to show that the veteran was entitled to a permanent 10 per cent. disability rating for compensation purposes from the time of his discharge to February 12, 1920, and to a permanent total disability rating from February 12, 1920, to his death. The writer obviously desired to bring the case within the provisions of section 305 of the World War Veterans' Act of 1924, as amended, 38 U.S.C.A. § 516, which provides in effect that uncollected compensation may be applied so as to prevent the lapse of war risk insurance; but the basic purpose of the letter was to present a claim for the insurance on behalf of the parties concerned. In reply the correspondent was informed that the matter had been referred to the proper appellate board, and on February 20, 1931, a letter was written to him stating that the Central Board of Appeals had reaffirmed their decisions of 1924 in the absence of any new evidence to warrant a change of findings.

On March 31, 1931, W. B. Rouse, as "attorney for the heirs of David Carnegie, deceased," wrote a letter received by the Veterans' Administration on April 2, 1931, stating that an action on the claim was contemplated and requesting the name of the beneficiary in the certificate, and such further decision as the Bureau might deem wise to make. In response the Administration wrote the attorney that the matter was one for consideration of the Insurance Claims' Council, and forms were inclosed to be filled out and returned. The forms were filled out by Ester C. Lopez, sister of the veteran, and returned to the Veterans' Administration in a letter from the attorney, who stated that because of the death of the beneficiary named in the policy, the insurance was payable under the distribution laws of North Carolina to the sister and brother of the insured. On October 7, 1931, the Insurance Claims' Council denied the claim that the veteran was permanently and totally disabled at any time during the life of the policy, and notice of this denial was sent to Bryant T. Carnegie and to the attorney in letters of October 16, 1931, wherein it was stated that the claimant might appeal from the adverse decision to the Administrator of Veterans' Affairs by giving written notice within sixty days.

On November 5, 1931, the Administration acknowledged an inquiry of October 26, 1931, relative to the status of the claim from an American Legion official in Washington, D. C., and stated that the claim was denied on October 7, 1931, and that the interested persons had been advised of their right to appeal. The letter also stated that the interest of the Legion in the final decision on the claim was noted, and that it would be advised as soon as the decision had been reviewed by the Administrator of Veterans' Affairs.

On November 25, 1931, the Administration addressed letters to Bryant T. Carnegie and to the attorney stating that they might consider the denial of the Insurance Claims' Council of October 7, 1931, as final for the purpose of instituting suit, and if they accepted the denial as final, the suspension of the statute of limitations provided by section 19 of the World War Veterans' Act of 1924 would cease from and after the date of the letter, plus the number of days usually required for the transmission of regular mail from Washington to New Bern, N. C. It was declared that the letter of October 16, 1931, was amended accordingly.

The limitations prescribed in section 19 of the World War Veterans' Act of 1924, as amended by the Acts of July 3, 1930, 46 Stat. 992, 1016 (38 U.S.C.A. § 445) are as follows:

"In the event of disagreement as to claim * * * under a contract of insurance between the Veterans' Administration and any person or persons claiming thereunder an action on the claim may be brought against the United States * * * in the district court of the United States in and for the district in which such persons or any one of them resides. * * * All persons having or claiming to have an interest in such insurance may be made parties to such suit. * * *

"No suit on yearly renewable term insurance shall be allowed under this section unless the same shall have been brought within six years after the right accrued for which the claim is made or within one year after July 3, 1930, whichever is the later date. * * * Provided further, That this limitation is suspended for the period elapsing between the filing in the Veterans' Administration of the claim sued upon and the denial of said claim by the Administrator of Veterans' Affairs. * * * If suit is seasonably begun and fails for defect in process, or for other reasons not affecting the merits, a new action, if one lies, may be brought within a year though the period of limitations has elapsed. * * *

"The term `claim,' as used in this section, means any writing which alleges permanent and total disability at a time when the contract of insurance was in force, or which uses words showing an intention to claim insurance benefits."

The first point for decision is whether the action filed on February 4, 1932, was too late in view of the provisions of the statute. It is not contended that the claimants may avail themselves of the provision of the statute which permits the institution of suit within six years after the accrual of the right, because both the original and amended complaints allege that permanent and total disability occurred prior to February 1, 1919; but it is claimed that the suit was brought within the limitation period of one year after July 3, 1930, in view of the suspension of the limitation for the period elapsing between the filing in the Bureau of the claim and the denial of the claim by the Administrator of Veterans' Affairs. The effect of the latter provision of the statute is that the running of the period of limitations is suspended for the number of days, prior to and including July 3, 1931, that the claim is pending in the Bureau, and that the claimant is entitled to bring suit within that number of days after the denial of his claim. Tyson v. United States (C.C. A.) 76 F.(2d) 533; Id., 56 S.Ct. 390, 80 L.Ed. ___; Weaver v. United States (C. C.A.) 72 F.(2d) 20.

The government has waived, for the purposes of the instant suit, any right it might have to argue that the denial by the Central Board of Appeals on December 19, 1924, was a sufficient disagreement to have supported a suit under the terms of the Act of July 3, 1930, as amended by the Joint Resolution of January 28, 1935 (38 U.S.C.A. § 445c); Earwood v. United States, 294 U.S. 695, 55 S.Ct. 511, 79 L. Ed. 1233; and so we confine our attention to the transactions of 1931. The period between February 5 and February 20, 1931, when the inquiry from the representative of the American Legion was pending, to the Veterans'...