Carol L. Terry, Claimant-Appellant v. Anthony J. Principi, Secretary of Veterans Affairs

Citations: 367 F.3d 1291; 2004 U.S. App. LEXIS 9056; 2004 WL 1041542Docket: 03-7107

Court: Court of Appeals for the Federal Circuit; May 10, 2004; Federal Appellate Court

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Carol L. Terry, the appellant, challenges the interpretation by the Court of Appeals for Veterans Claims regarding the two-year limitation under 38 U.S.C. 5121(a). This statute was construed to restrict survivors of veterans to recover only benefits that accrued in the two years before the veteran's death, as supported by prior cases such as Marlow v. West and Bonny v. Principi. The Federal Circuit, however, disagrees with this interpretation, stating that the terms of 5121(a) do not limit the survivor’s potential recovery in such a manner. The court reverses the previous decision and remands the case for further proceedings. The background reveals that Carol Terry is the widow of Army veteran Vander Terry, who had been awarded a total-disability rating due to individual unemployability, effective retroactively to April 14, 1986. After Mr. Terry's death in 1997, Carol filed for unpaid accrued benefits based on a claim of clear-and-unmistakable error regarding the effective date of his disability rating. The VA and subsequent appeals denied her claim, leading to the current appeal. The court's opinion, authored by Circuit Judge Prost, highlights the need to reassess the interpretation of the statute and the implications for survivors' rights to benefits.

The court has jurisdiction over this appeal according to 38 U.S.C. 7292(c), and will review the statutory interpretation of the Court of Appeals for Veterans Claims de novo, without deference. The appellant argues that 38 U.S.C. 5121(a) is unambiguous and does not restrict a survivor's receipt of accrued benefits to those earned in the two years prior to the veteran's death, supported by legislative history. In contrast, the government contends that the court is bound by precedents in Haines v. West and Richard v. West, which assert that payments under 5121(a) are limited to the two years preceding death. The government also maintains that 5121(a) is ambiguous and that legislative history favors the Court of Appeals for Veterans Claims’ interpretation. If there is ambiguity, the government suggests the court should defer to the VA's reasonable interpretation under the Chevron framework.

The court's analysis begins with the statute's language, which is clear and unambiguous, indicating that the limitation on accrued benefit payments to survivors pertains to those benefits due and unpaid for a maximum of two years, not confined to benefits accrued in the two years before death. The statute distinguishes between "periodic monetary benefits" and "accrued benefits," with the separation indicated by a comma. This structure clarifies that the phrase "upon death" refers to the timing of payment rather than imposing a two-year accrual limitation. Ultimately, the court concludes that the statute allows survivors to recover accrued benefits for a two-year period without restricting the recovery to benefits accrued immediately prior to the veteran's death.

The government's arguments against the court's interpretation of 5121(a) are unpersuasive. Firstly, the government claims that prior court decisions (Haines and Richard) dictate the outcome; however, the court clarifies that references to the two-year limitation in these cases are merely dicta, lacking essential discussion of 5121(a). Secondly, the government asserts that legislative history from the Veterans' Benefits Act of 1957 supports a two-year limitation for survivor benefits. The court finds that the clear language of the statute negates the need for legislative history, but even if considered, it actually aligns with the appellant's interpretation. The 1957 Act maintained a one-year limit for benefits while removing the "prior to death" language from its predecessor, indicating Congress's intent to extend survivor benefit recovery beyond the immediate period before death. Thirdly, the government argues that the context of 5121(a) supports its position; however, the court concludes that the statute’s language further substantiates the appellant's claim by linking terms to the date of death without imposing a two-year limit. The court emphasizes that Congress's intentional exclusion of certain language in different sections of the statute suggests deliberate choices in its drafting.

The government asserts that if Congress's intent regarding the two-year limitation in 38 U.S.C. § 5121(a) is unclear, the court should defer to the VA's reasonable interpretation per Chevron deference. The government argues that the absence of a disclaimer from Congress and the legislative history contribute to the statute's ambiguity. However, if the statute is unambiguous, as the court states, the absence of a disclaimer or a review of legislative history is irrelevant, negating the need for Chevron analysis. The court emphasizes that it assumes Congress's intent is clear in the statute's language. 

The court concludes that the unambiguous language of 38 U.S.C. § 5121(a) restricts a survivor's recovery of accrued veteran's benefits to a maximum of two years of benefits accrued during the veteran's lifetime. This interpretation contradicts the Court of Appeals for Veterans Claims' interpretation, leading to the reversal and remand of that court's decision denying the appellant's claim for her spouse's accrued benefits.

Additionally, the Veterans' Benefits Act of 2003 amended § 5121(a) to eliminate the two-year limitation on a survivor's recovery of accrued benefits, but this amendment is not retroactive. The court clarifies that its references to § 5121(a) pertain to the version effective at the time of the veteran's death in August 1997. It also notes that it is not bound by the earlier decisions of the Court of Appeals for Veterans Claims regarding this statute.

A concurring opinion expresses agreement with the outcome but disputes the majority's reasoning, arguing that the statute's language is ambiguous regarding which two-year period is referenced. The concurring judge acknowledges previous interpretations that suggest the two years might refer to the period immediately prior to death but ultimately agrees with the majority that the statutory changes indicate the two years can refer to any two-year period.