**UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS**

[No]{.smallcaps}. 01-724

[Earl R. Wilkes, Jr., Appellant]{.smallcaps},

[v.]{.smallcaps}

[Anthony J. Principi,]{.smallcaps}

[Secretary of Veterans Affairs, Appellee.]{.smallcaps}

On Appeal from the Board of Veterans\' Appeals

(Decided August 14, 2002 )

*Clark C. Evans*, of Judsonia, Arkansas, was on the briefs for the
appellant.

*Tim S. McClain*, General Counsel; *Joan E. Moriarty*, Acting Assistant
General Counsel; *Darryl A. Joe*, Acting Deputy Assistant General
Counsel; and *Barbara J. Finsness*, all of Washington, D.C., were on the
brief for the appellee.

Before FARLEY, HOLDAWAY, and STEINBERG, *Judges*.

STEINBERG, *Judge*: The appellant, the nephew of a deceased veteran, is
one of the beneficiaries of personal property named in the veteran\'s
will, and the coexecutor of the veteran\'s estate. Through counsel, he
seeks review of a December 27, 2000, Board of Veterans\' Appeals (Board
or BVA) decision that denied the appellant\'s claim for Department of
Veterans Affairs (VA) accrued benefits. Record (R.) at 1‑7. The
appellant and the Secretary have each filed a brief, and the appellant
has filed a reply. This appeal is timely, and the Court has jurisdiction
pursuant to 38 U.S.C. §§ 7252(a) and 7266(a). For the reasons that
follow, the Court will affirm the Board decision.

**I. Relevant Background**

The veteran, George W. Wilkes, served on active duty in the U.S. Navy
from April 1941 to December 1944. *See* R. at 2. In April 1993, a VA
regional office (RO) denied his claims for a VA rating greater than 40%
for his service-connected spinal cord disability and for VA special
monthly compensation (SMC). R. at 12-15. The veteran appealed that VARO
decision to the Board, and the Board remanded both matters for further
development. R. at 60-63. In an April 9, 1997, decision, the RO granted
a 100% rating for his service-connected spinal cord disability,
effective September 16, 1992, and granted SMC. R. at 66-70. The award
for the retroactive increase in VA disability compensation benefits
totaled \$109,464. R. at 72. The veteran died on April 22, 1997. R. at
84. Six days later, on April 28, 1997, unaware of the veteran\'s death,
VA electronically transferred the \$109,464 to the veteran\'s bank
account. R. at 85. On May 8, 1997, the veteran\'s bank electronically
transferred that amount back to VA and notified VA on May 15, 1997, that
the bank had returned the funds because the veteran had died. R. at 74.
The bank requested that VA either return the funds to the account at the
bank or transfer them to the attorney handling the veteran\'s estate.
*Ibid*.

On June 23, 1997, the appellant and his cousin, the niece of the veteran
\[hereinafter together referred to as \"claimants\"\], filed a VA form
entitled \"Application for Amounts Due Estates of Person Entitled to
Benefits\". R. at 100-01. That form indicated that the expenses incurred
for the last sickness and burial of the decedent had been prepaid and
listed only the veteran\'s nephew and niece, then ages 47 and 39,
respectively, as the surviving relatives who might be entitled to share
in the veteran\'s estate. *Ibid*. In July 1997, the RO denied their
claim and stated that, under 38 U.S.C. § 5121 and 38 C.F.R. § 3.1000, VA
could \"only pay\" to a nephew or a niece \"accrued benefits as a
reimbursement for the last expenses of the veteran\". R. at 106-07. The
claimants\' attorney then sent a letter to the RO specifying that the
claim was not one under 38 U.S.C. § 5121 and 38 C.F.R. § 3.1000 but one
under 38 U.S.C. § 5122 and 38 C.F.R. § 3.1003 and that, under the latter
provisions, the estate was entitled to the \$109,464. R. at 111-12. In
August 1997, the RO advised the claimants\' attorney that the RO could
not make a determination under 38 U.S.C. § 5122 on the claim and had
forwarded the claim to the General Accounting Office (GAO) for
settlement. R. at 124. VA then requested an opinion from its own Office
of General Counsel (OGC) as to whether the award was payable to the
veteran\'s estate under 38 U.S.C. §§ 5121 or 5122 or \"any other
reference\". R. at 128.

In October 1997, the VA General Counsel (GC) issued an advisory opinion
noting that the RO had submitted the claim to the OGC for an opinion
rather than sending it to the GAO and concluding that, in cases where VA
issues payment to a veteran after the veteran\'s death, section 5121,
not section 5122, is applicable to a claim filed by the veteran\'s
estate. R. at 130-33. The VAGC reasoned that section 5122 applies to
benefit checks that were received but not negotiated prior to the
payee\'s death and that, in the instant case, VA did not make, and the
veteran did not receive, the payment prior to the veteran\'s death. R.
at 131. The GC then determined that accrued benefits were not payable to
the veteran\'s estate under section 5121 because the estate does not
fall within the class of individuals eligible to receive accrued
benefits under that section. R. at 133. On November 21, 1997, the RO
notified the claimants\' attorney of the GC\'s denial of the claim and
forwarded to him a copy of the GC advisory opinion. R. at 137. The
claimants then filed a Notice of Disagreement (R. at 139), the RO issued
a Statement of the Case (R. at 162-165), and each of the claimants
individually filed a timely Substantive Appeal to the BVA (R. at 169-70,
171-74).

In the BVA decision here on appeal, the Board found that there was no
legal basis for payment of accrued benefits to the veteran\'s estate
under either 38 U.S.C. § 5121 and 38 C.F.R. § 3.1000 or under 38 U.S.C.
§ 5122 and 38 C.F.R. § 3.1003. R. at 3. The Board concluded (1)  that
the claimants were ineligible for accrued benefits under section 5121
because they did not fall into any specified category of eligible payees
under that section and (2) that section 5122 was inapplicable because
the veteran did not receive the payment prior his death. R. at 6.

In his brief, the appellant asks the Court to \"declare the 1997
electronic transfer of \$109,464 from the veteran\'s bank account to VA
a mistake and an unauthorized transaction\" and to order \"restitution
by VA to the beneficiaries of the estate\". Brief (Br.) at 16. He states
that he does not dispute the Board\'s findings of fact and asserts that
the Board decision contains legal error. Br. at 4. Despite his argument
before the Board that section 5122 governs his appeal (R. at 169),
before the Court he contends that the \$109,464 at issue is not a
periodic payment but a one-time lump-sum payment and that the claim thus
does not qualify as one for accrued benefits under sections 5121 and
5122 (Br. at 3-6). He further asserts that although VA is statutorily
authorized to retrieve and cancel checks pursuant to 38 U.S.C. § 5120,
VA is not authorized by statute to retrieve electronically transferred
funds from the accounts of deceased payees. Br. at 8. He then argues
that because his claim is not governed by title 38 of the U.S. Code or
by VA regulation, other federal and state statutes may be applicable.
*Ibid*. He asserts that if those other provisions apply, then the
bank\'s electronic transfer of the funds to VA and VA\'s receipt of
those funds were prohibited and that the funds in question should be
returned to the veteran\'s estate. Br. at 8-15.

The Secretary seeks affirmance of the Board decision on the ground that
the appellant lacks legal entitlement to the \$109,464; the Secretary
asserts that section 5122 is inapplicable to this case because the
veteran did not receive the funds prior to his death and that, although
the funds constituted a periodic payment, the estate is not eligible to
receive accrued benefits under section 5121. Br. at 1-10. The Secretary
further contends that the federal and state statutes cited by the
appellant are inapplicable. Br. at 8. In his reply, the appellant
reiterates his prior arguments and asserts that his claim is not one for
accrued benefits because the \$109,464 was not \"due and unpaid\" as
required by section 5121. Reply at 1-3.

**II. Analysis**

Section 5121 defines accrued benefits as \"periodic monetary benefits .
. . to which an individual was entitled at death under existing ratings
or decisions, or . . . based on evidence in the file at date of death .
. . and due and unpaid for a period not to exceed two years.\" 38 U.S.C.
§ 5121(a); *see also* 38 C.F.R. § 3.1000 (2001). Section 5121(a)(2)
provides that upon the death of a veteran, payment should be made to the
living person first listed: The \"veteran\'s spouse\", \"the veteran\'s
children\", or \"the veteran\'s dependent parents\". 38 U.S.C.
§ 5121(a)(2). In order to be eligible for accrued benefits, therefore,
the claimant must qualify as a member of one of the statutorily
enumerated categories of recipients. *See Burris v. Principi*, 15
Vet.App. 348, 352-53 (2001) (concluding that 70-year-old appellant was
ineligible for accrued benefits because he did not satisfy statutory
definition of \"child\" in 38 U.S.C. § 101(4)(A), which excludes anyone
over age 23 unless they were \"permanently incapable of self-support\"
before attaining age 18); *Marlow v. West*, 12 Vet.App. 548, 551 (1991)
(noting that section 5121(a) \"limits qualifying survivors to the
deceased veteran\'s spouse, child . . . or dependent parents\").
Subsection (a)(5) provides: \"In all other cases, only so much of the
accrued benefits may be paid as may be necessary to reimburse the person
who bore the expense of last sickness and burial.\" 38 U.S.C.
§ 5121(a)(5).

Section 5122, of title 38, U.S. Code, provides:

> ***A check received by a payee*** in payment of accrued benefits
> shall, if the payee died on or after the last day of the period
> covered by the check, be returned to the issuing office and canceled,
> unless negotiated by the payee or the duly appointed representative of
> the payee\'s estate. The amount represented by such check, or any
> amount recovered by reason of improper negotiation of any such check,
> shall be payable in the manner provided in section 5121 of this title,
> without regard to section 5121(c) of this title. Any amount not paid
> in the manner provided in section 5121 of this title shall be paid to
> the estate of the deceased payee unless the estate will escheat.

38 U.S.C. § 5122 (emphasis added); *see also* 38 C.F.R. § 3.1003(a)
(2001).

It is unclear whether the Board decision should be reviewed under the
\"arbitrary and capricious standard\" in 38 U.S.C. § 7261(a)(3)(A), *see
Butts v. Brown*, 5 Vet.App. 532, 539 (1993) (en banc) (applying
arbitrary-and-capricious standard when reviewing Board\'s application of
law to facts), or the less deferential de novo standard under 38 U.S.C.
§ 7261(a)(1), *see Butts*, *supra* (noting Court\'s \"longstanding
practice of reviewing questions of law de novo without any deference to
the BVA\'s conclusions of law\"). However, for the reasons that follow,
even under the nondeferential de novo standard, the Board decision must
be affirmed.

Citing this Court\'s opinions in *Pappalardo v. Brown*, 6 Vet.App. 63,
65 (1993), and *Gillis v. West*, 11 Vet.App. 441, 442-43 (1998), the
appellant asserts that his claim is not one for accrued benefits because
the \$109,464 was a one-time lump-sum payment rather than a periodic
monetary benefit and that, accordingly, both sections 5121 and 5122 are
inapplicable. The Court disagrees. In *Pappalardo*, the Court held that
a one-time payment for assistance for specially adapted housing under
chapter 21 of title 38, U.S. Code, did not qualify as a periodic
monetary benefit for purposes of section 5121. *Pappalardo*, *supra*. In
*Gillis*, the Court similarly concluded that an
automobile-purchase-assistance payment under chapter 39 of title 38,
U.S. Code, was not periodic in nature. *Gillis*, *supra*. In the latter
case, the Court noted that although the automobile-purchase-assistance
payment was not statutorily defined as a one-time payment, it was not
\"periodic\", which is defined as \"\'recurring at fixed intervals; to
be made or done, or to happen, at successive periods separated by
determined intervals of time\'\". *Ibid* (quoting [Black\'s Law
Dictionary 1138]{.smallcaps} (6th ed. 1990). In the instant case, the
\$109,464 was an award for retroactive disability compensation benefits
and SMC benefits, both of which are periodic payments. *See* 38 U.S.C.
§ 101(13) (defining \"compensation\" to mean, inter alia, \"a monthly
payment made by the Secretary to the veteran because of a
service-connected disability\").

The appellant further argues that his claim cannot be characterized as
one for accrued benefits because the award was not \"due and unpaid\" --
that is, the funds were electronically transferred into the veteran\'s
account. However, the payment was due and unpaid ***at the time of the
veteran\'s death*** because the funds were not transferred until six
days after his death (R. at 84, 85). *See* *Zevalkink v. Brown*,
6 Vet.App. 483, 490 (1994) (noting that accrued benefits are periodic
monetary benefits to which veteran was entitled at death and that were
unpaid at time of death). Despite the appellant\'s assertions to the
contrary, under the provisions of section 5121 his claim is properly one
for accrued benefits, and the Court need not and will not reach the
appellant\'s arguments as to the potential applicability of other
federal and state statutes to a claim that would not be governed by the
accrued-benefits provisions. The Court notes that those other federal
and state statutes may be relevant to any cause of action that the
appellant might have against the bank rather than the instant claim
against VA.

Having determined that the funds at issue are accrued benefits under
section 5121, the Court will now turn to whether the appellant is
entitled to receive accrued benefits under that section. The appellant,
the nephew of the veteran, does not fall within a specifically
enumerated category of recipients under section 5121(a) because he is
not a child, spouse, or dependent parent of the veteran. *See* 38 U.S.C.
§ 5121(a)(2); *see also* 38 U.S.C. §§ 101(3), (4), (5), 102 (defining,
respectively, \"surviving spouse\", \"child\", and \"parent\", and
relating to \"dependent parent\"). Moreover, he did not pay any expenses
relating to the veteran\'s last sickness or burial. *See* 38 U.S.C.
§ 5121(a)(5); R. at 100-01. Thus, he is not eligible for accrued
benefits, *see Burris* and *Marlow*, both *supra*, and the Board
properly denied as a matter of law his claim under section 5121. *See*
*Sabonis* *v. Brown*, 6 Vet.App. 426, 430 (1994) (affirming Board denial
of relief sought where \"no authority in law . . . would permit . . . VA
to grant appellant\'s request\[\] for relief\").

The Court notes that the Secretary is correct that section 5122 is
inapplicable to the instant case because that section applies to
payments ***received*** but not negotiated by a payee. *See* 38 U.S.C.
§ 5122; 38 C.F.R. § 3.1003(a). Because the veteran died before VA
electronically transferred the \$109,464 (R. at 84, 85), he could not
have \"received\" the transferred funds within the meaning of 38 U.S.C.
§ 5122. The legislative history of sections 5121 and 5122 reveals that
Congress intended that payments directed to a payee after his or her
death be payable under section 5121 rather than under section 5122. In
May 1953, Congress amended Veterans Regulation 2(A) and streamlined the
procedure under which beneficiaries could claim checks received but not
negotiated prior to a veteran\'s death. Act of May 29, 1953, ch. 84,
§ 1, 67 Stat. 39, 39-40. The report of the Senate Committee on
Veterans\' Affairs stated:

> \[A\] person may die before receiving his first payment under an
> approved award covering a retroactive period of entitlement. Such
> accrued amounts . . . are payable by the Veterans\' Administration in
> accordance with \[the predecessor of section 5121(a)\] to the
> surviving spouse, child or children, dependent mother or father, or
> the person who bore the expenses of the last illness and burial.

[S. Rep. No.]{.smallcaps} 227 (1953), *reprinted in* 1953 U.S.C.C.A.N.
1665, 1666. By its terms, then, section 5122 applies only to payments
received but not negotiated prior to the payee\'s death. Accordingly,
the Board did not err when it determined that in the instant case there
was no basis under section 5122 for the payment of accrued benefits.

The Court notes that the Board decision is silent as to the
applicability of the Veterans Claims Assistance Act of 2000, Pub. L. No.
106-475, 114 Stat. 2096 (Nov. 9, 2000) (VCAA), which was enacted prior
to the issuance of the Board decision. Because neither party has
suggested the beneficiality of the application of the VCAA to this case
(although the Secretary did mention the VCAA (Br. at 9), the appellant
did not raise the issue in either of his briefs (*see* Br. at 1-16;
Reply at 1-3)), the Court will not address the matter. *See Maxson v.
Principi*, 15 Vet.App. 241, 242 (2001) (per curiam order); *Tellex v.
Principi*, 15 Vet.App. 233, 240 (2001).

**III. Conclusion**

Upon consideration of the foregoing, because the Court finds no legal
error in the Board\'s December 27, 2000, decision, that decision is
affirmed.

AFFIRMED.