Burkhart v. Wilkie

Case: 19-1667 Document: 45 Page: 1 Filed: 08/21/2020

United States Court of Appeals

for the Federal Circuit

______________________

SALLY A. BURKHART,

Claimant-Appellant

v.

ROBERT WILKIE, SECRETARY OF VETERANS

AFFAIRS,

Respondent-Appellee

______________________

2019-1667

______________________

Appeal from the United States Court of Appeals for

Veterans Claims in No. 16-1334, Chief Judge Margaret C.

Bartley, Judge William S. Greenberg, Judge Michael P. Al-

len.

______________________

Decided: August 21, 2020

______________________

SEAN S. TWOMEY, Gibson, Dunn & Crutcher LLP, Los

Angeles, CA, argued for claimant-appellant. Also repre-

sented by ANDREW T. BROWN.

MOLLIE LENORE FINNAN, Commercial Litigation

Branch, Civil Division, United States Department of Jus-

tice, Washington, DC, argued for respondent-appellee.

Also represented by ETHAN P. DAVIS, MARTIN F. HOCKEY,

JR., ROBERT EDWARD KIRSCHMAN, JR.; BRANDON A. JONAS,

Case: 19-1667 Document: 45 Page: 2 Filed: 08/21/2020

2 BURKHART v. WILKIE

Y. KEN LEE, Office of General Counsel, United States De-

partment of Veterans Affairs, Washington, DC.

______________________

Before DYK, TARANTO, and HUGHES, Circuit Judges.

HUGHES, Circuit Judge.

Sally Burkhart, the widow of a United States Army vet-

eran, appeals the decision of the Court of Appeals for Vet-

erans Claims denying her eligibility for home loan

guaranty benefits from the Department of Veterans Affairs

under title 38, chapter 37. We conclude that, as the sur-

viving spouse of a veteran without a service-connected dis-

ability, Ms. Burkhart is not eligible for home loan guaranty

benefits under any of the statutes she relies upon. And, the

Veterans Court correctly determined that it lacked the

power to grant her equitable relief. We therefore affirm the

decision of the Veterans Court.

I

Ms. Burkhart is the widow of U.S. Army veteran David

Burkhart, who served honorably from August 1952 to July

1954 in the Korean War and was awarded two Bronze

Stars. He had no service-connected disabilities during his

life. Mr. Burkhart’s health declined in the late 1990s, and

he was admitted to a VA inpatient nursing facility. He died

soon after, while still in VA care.

Ms. Burkhart then filed a claim for dependency and in-

demnity compensation (DIC) benefits under 38 U.S.C.

§ 1151 (chapter 11). Section 1151 provides for compensa-

tion related to the death or injury of a veteran in certain

circumstances while the veteran was under VA care.

Compensation under this chapter [11] and depend-

ency and indemnity compensation under chap-

ter 13 of this title shall be awarded for a qualifying

additional disability or a qualifying death of a

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BURKHART v. WILKIE 3

veteran in the same manner as if such additional

disability or death were service-connected.

38 U.S.C. § 1151(a) (2012). For example, an award is made

when the disability or death was caused by “carelessness,

negligence, lack of proper skill, error in judgment, or simi-

lar instance of fault” in the VA care or by “an event not

reasonably foreseeable.” Id. § 1151(a)(1). Having deter-

mined that Mr. Burkhart’s “death [while in VA care] was

due to an event not reasonably foreseeable,” VA granted

Ms. Burkhart’s request for DIC benefits. Burkhart v.

Wilkie, 30 Vet. App. 414, 416 (2019) (alteration in original);

see 38 U.S.C. § 1151(a)(1)(B). But, as the Veterans Court

later made clear, “[t]here [was] no indication that the cause

of [Mr. Burkhart’s] death was related to a service-con-

nected disability or that [Ms. Burkhart] claimed service

connection in connection with [Mr. Burkhart’s] death.”

Burkhart, 30 Vet. App. at 416.

In 2007, Ms. Burkhart sought a certificate of eligibility

(COE) for home loan guaranty benefits available under ti-

tle 38, chapter 37 of the U.S. Code. VA issued her a COE

that same year, but she never finalized a loan. Six years

later, in 2013, she requested a new COE for a home loan

guaranty. This time, VA determined that Ms. Burkhart

was ineligible for home loan guaranty benefits and that the

initial 2007 COE had been erroneously issued.

Ms. Burkhart disputed VA’s decision and eventually ap-

pealed it to the Board of Veterans’ Appeals.

The Board found that Mr. Burkhart had no service-con-

nected disabilities during his lifetime. Nor did he die of a

service-connected disability. And, because chapter 37

home loan guaranty benefits are available only to, as rele-

vant here, “the surviving spouse of any veteran . . . who

died from a service-connected disability,” 38 U.S.C.

§ 3701(b)(2) (2012), and Mr. Burkhart did not otherwise

meet the criteria in 38 U.S.C. § 3701(b)(6), the Board

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4 BURKHART v. WILKIE

confirmed that Ms. Burkhart was indeed ineligible for

home loan guaranty benefits.

Ms. Burkhart appealed three legal issues from the

Board’s decision to the Veterans Court: (1) “whether a vet-

eran’s surviving spouse who is entitled to [DIC] under

38 U.S.C. § 1151 is also thereby entitled to ancillary home

loan guaranty benefits under title 38, chapter 37”;

(2) “whether 38 U.S.C. § 3721 . . . bars VA from contesting

a surviving spouse’s eligibility once the Agency has issued

a COE before a loan is issued”; and (3) “whether the Court

may use equitable principles to grant these home loan

guaranty benefits and order VA to guarantee a loan by em-

ploying equitable estoppel, waiver, laches, or injunctive re-

lief.” Burkhart, 30 Vet. App. at 415–16.

The Veterans Court majority affirmed the Board’s de-

cision that Ms. Burkhart was ineligible for home loan guar-

anty benefits under the plain language and legislative

history of § 1151 and § 3701. Id. at 417–21. Judge Green-

berg dissented on this issue, concluding that Ms. Burkhart

“was entitled to the home loan guaranty benefits ancillary

to her section 1151 dependency and indemnity benefits.”

Id. at 427–29.

The Veterans Court also held that 38 U.S.C. § 3721—

the so-called incontestability provision—applies only to

“the relationship between the Government and lending in-

stitutions such as banks, not the Government and COE re-

cipients, and as to the documents guaranteeing the loan,

not a COE.” Id. at 421. Section 3721 states:

Any evidence of guaranty or insurance issued by

the Secretary shall be conclusive evidence of the el-

igibility of the loan for guaranty or insurance under

the provisions of this chapter and of the amount of

such guaranty or insurance. Nothing in this sec-

tion shall preclude the Secretary from establishing,

as against the original lender, defenses based on

fraud or material misrepresentation. The

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BURKHART v. WILKIE 5

Secretary shall not, by reason of anything con-

tained in this section, be barred from establishing,

by regulations in force at the date of such issuance

or disbursement, whichever is the earlier, partial

defenses to the amount payable on the guaranty or

insurance.

38 U.S.C. § 3721. The Veterans Court reasoned that,

first, § 3721 refers only to the Secretary and lenders, not

individual beneficiaries like Ms. Burkhart; second, § 3721

encompasses “[a]ny evidence of guaranty,” which, read in

light of other sections of chapter 37, refers to the stage of

the loan process where a loan has been procured, not an

early stage like obtaining a COE; and, third, the legislative

history of § 3721 illustrates Congress’s desire to incentivize

a secondary market in VA guaranteed loans. Burkhart,

30 Vet. App. at 421–25.

Finally, the Veterans Court denied Ms. Burkhart’s re-

quests for equitable relief based on injunctive relief, equi-

table estoppel, laches, and waiver. Id. at 425. Broadly, the

Veterans Court concluded that to grant Ms. Burkhart relief

“based solely on equity would expand the scope of [its] ju-

risdiction.” Id. at 426. The court also explained that

Ms. Burkhart would have had to prevail on the merits be-

fore the court could grant an injunction. Id. Second, equi-

table estoppel has not been applied against the government

as a matter of common law, and where it is available, Con-

gress has created it by statute. See id. at 426–27. Here,

however, the Veterans Court reasoned that the incontesta-

bility provision reflects Congress’s intent that only lenders

receive this privilege of estoppel. Id. The Veterans Court

also dismissed Ms. Burkhart’s assertions of laches and

waiver because those two equitable principles are equita-

ble defenses, not affirmative theories of relief. Id. at 427.

The Veterans Court entered judgment on January 28,

2019. Ms. Burkhart timely appealed. We have jurisdiction

under 38 U.S.C. § 7292.

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6 BURKHART v. WILKIE

II

We review de novo the Veterans Court’s interpretation

of statutes. Wanner v. Principi, 370 F.3d 1124, 1128

(Fed. Cir. 2004); see 38 U.S.C. § 7292(c). On appeal,

Ms. Burkhart raises the same three legal issues that she

did before the Veterans Court. We address each in turn.

A

Ms. Burkhart argues that the Veterans Court erred in

interpreting § 1151(a) and § 3701(b)(2) to exclude widowed

spouses like her from home loan guaranty benefits under

chapter 37. She reasons that she should be eligible for a

home loan guaranty because § 3701(b)(2) defines a veteran

eligible for chapter 37 benefits as “the surviving spouse of

any veteran . . . who died from a service-connected disabil-

ity,” § 3701(b)(2). Though her husband did not die from a

service-connected disability, Ms. Burkhart argues that this

definition still includes her because § 1151(a) requires

treating her husband’s death “as if” it was service-con-

nected for all purposes.

The plain language of § 1151(a) contradicts

Ms. Burkhart’s argument. It expressly provides for com-

pensation “as if” the disability or death were service-con-

nected only for the purposes of chapter 11 and chapter 13

benefits. See § 1151(a) (specifying “[c]ompensation under

this chapter [11] and [DIC] under chapter 13”). 1 But VA’s

home loan guaranty program falls under chapter 37. By

expressly enumerating the chapters to which it applies,

§ 1151 does not redefine a service-connected death or disa-

bility for all benefits; it merely “provides an exception that

1 Note that § 1151(c) also provides for treating an

“additional disability under this section . . . as if it were a

service-connected disability” for title 38, chapters 21

and 39. Again, this provision does not include chapter 37

benefits.

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BURKHART v. WILKIE 7

grants compensation for some non-service-connected disa-

bilities, treating those disabilities for some purposes ‘as if’

they were service-connected.” Alleman v. Principi,

349 F.3d 1368, 1370–71 (Fed. Cir. 2003) (quoting

§ 1151(a)).

Attempting to sidestep this plain language,

Ms. Burkhart cites our decision in Kilpatrick v. Principi,

327 F.3d 1375 (Fed. Cir. 2003), as proof that we have pre-

viously expanded the benefits available to a § 1151 benefi-

ciary beyond those provided in chapters 11 and 13. Indeed,

in Kilpatrick, we concluded that a § 1151 beneficiary was

entitled to receive special adaptive housing benefits under

38 U.S.C. § 2101, even though those benefits fall under

chapter 21, not chapters 11 or 13. The Veterans Court cor-

rectly distinguished Kilpatrick from the case at hand in

multiple respects. In particular, the Kilpatrick panel con-

cluded that the language of § 2101 was not clear and re-

sorted to legislative history. Kilpatrick, 327 F.3d

at 1378–79, 1381–82. That history led the Kilpatrick panel

to conclude that § 1151 did encompass § 2101 benefits be-

cause the predecessor to § 1151 originally provided benefits

for the predecessor to § 2101, although the 1957 recodifica-

tion of title 38 inadvertently separated the two provisions,

id. at 1381. The Kilpatrick panel therefore concluded that

Congress originally intended for § 1151 to encompass the

special adaptive housing benefits under § 2101 at issue

there. Id. at 1382–83. 2

2 Bolstering our conclusion that § 1151 does not ex-

tend chapter 37 benefits to Ms. Burkhart is that, after Kil-

patrick, Congress added § 1151(c), which extended the “as

if” service connection to chapter 21 and chapter 39 benefits.

Veterans Benefits Improvement Act, Pub. L. No. 108-454,

§ 304, 118 Stat. 3598, 3611 (2004). But Congress made no

change to § 1151(a), or elsewhere, that would treat chap-

ter 37 benefits similarly.

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8 BURKHART v. WILKIE

But, as the Veterans Court explained in detail in this

case, § 1151 and the benefits of chapter 37 have no such

shared lineage. See Burkhart, 30 Vet. App. at 419–20. We

therefore agree with the Veterans Court that Ms.

Burkhart’s Kilpatrick-based arguments are unavailing.

B

Ms. Burkhart next argues that under 38 U.S.C.

§ 3721—the incontestability provision—VA cannot now

dispute the validity of the COE it issued her, albeit errone-

ously, in 2007. We disagree for two reasons: (1) the incon-

testability provision applies only to the relationship

between the lending institution and VA; and (2) the incon-

testability provision applies only once a loan is issued.

First, § 3721 makes no reference to a loan beneficiary

like Ms. Burkhart; it only refers to the Secretary and “the

original lender.” 38 U.S.C. § 3721. This strongly implies

that Congress intended § 3721 to govern only the relation-

ship between the Secretary and lenders. Indeed, as the

Veterans Court commented, “it would be odd if the provi-

sion were focused on a beneficiary when that person is

never mentioned.” Burkhart, 30 Vet. App. at 422.

That the incontestability provision applies only to the

relationship between VA and lenders—not beneficiaries—

is also supported by the lending process described in

38 U.S.C. § 3702(c). See Food & Drug Admin. v. Brown &

Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (“A

court must therefore interpret the statute as a symmetrical

and coherent regulatory scheme and fit, if possible, all

parts into an harmonious whole.” (internal quotation

marks and citations omitted)). The first step to receiving a

loan involves establishing the veteran’s eligibility. 3 “An

3 As discussed in Section I, supra, the eligible vet-

eran includes the “the surviving spouse of any veteran . . .

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BURKHART v. WILKIE 9

honorable discharge shall be deemed to be a certificate of

eligibility to apply for a guaranteed loan.” § 3702(c). Al-

ternatively, the veteran “may apply to the Secretary for a

certificate of eligibility.” Id. Then, “[u]pon making a loan

guaranteed or insured under this chapter” the lender noti-

fies the Secretary of the required details of the loan and the

Secretary in turn provides the lender “with a loan guaranty

certificate or other evidence of the guaranty.” Id. It is that

“loan guaranty certificate or other evidence of the guar-

anty” that is the focus of § 3721—not the COE obtained

earlier in the process.

The lending process described in § 3702(c) also sup-

ports that § 3721 does not apply in cases such as this one,

where no loan was ever issued. 4 If a potential beneficiary

like Ms. Burkhart never receives a loan, there simply is no

loan guaranty to contest. There is only what chapter 37

repeatedly refers to as “guaranty entitlement” or “guaranty

or insurance housing loan entitlement.” See, e.g., 38 U.S.C.

§§ 3702(b), 3703(a)(1)(B)–(C). This is not the same as a

guaranty. Compare 38 U.S.C. § 3703(a)(1)(A)(i) (describing

when a loan is “automatically guaranteed” and for what

maximum amount), with § 3703(a)(1)(A)(ii) (discussing

“the maximum amount of guaranty entitlement available to

the veteran”) (emphasis added). We apply “the usual rule

that ‘when the legislature uses certain language in one part

of the statute and different language in another, the court

assumes different meanings were intended.’” Sosa v. Alva-

rez-Machain, 542 U.S. 692, 711 n.9 (2004).

who died from a service-connected disability.” 38 U.S.C.

§ 3701(b)(2).

4 Because such a case is not before us, we leave for

another day the question of whether the incontestability

provision would apply on a different set of facts, such as

where a lender did in fact issue a loan based only on a COE.

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10 BURKHART v. WILKIE

And, as the Veterans Court described, it makes sense

that a guaranty is not issued until a loan is made because,

even with a valid COE, a qualified beneficiary is necessary,

but not sufficient, for a home loan under the VA home loan

program. “Just because a person is eligible to participate

in the program does not mean that the program will guar-

antee any loan he or she wants. The loan must also meet

separate requirements.” Burkhart, 30 Vet. App. at 423

(emphasis in original). See 38 U.S.C. § 3703(a)(1). For ex-

ample, a loan is automatically guaranteed only if it is for

certain types of property, like property that is “owned and

occupied by the veteran as a home.” 38 U.S.C. § 3710(a).

We note that very little case law helpfully addresses

the incontestability provision. Ms. Burkhart, however, ar-

gues that the First Circuit’s decision in Mt. Vernon Cooper-

ative Bank v. Gleason, 367 F.2d 289 (1st Cir. 1966),

squarely establishes that the incontestability provision re-

solves her case in her favor. There, the First Circuit ob-

served that: “[T]he first sentence of section [3721], the

incontestability provision, concerns only the Administra-

tion’s certificate that a particular veteran is eligible for a

guaranty . . . and that he is entitled to a specified maximum

amount.” Id. at 291–92. Even if Mt. Vernon were binding

on this court, this quoted language is ambiguous, at best,

especially since it appears no COE was involved in that

case at all. See, e.g., id. at 290 (detailing that, after the

fraudulent beneficiary applied for the loan, “the bank for-

warded the papers to the [VA] with a request that the [VA]

issue a loan guaranty certificate” which the VA subse-

quently issued as a “loan guaranty”). We agree with the

Veterans Court that Mt. Vernon is only “marginally rele-

vant” and contains “seemingly contradictory observations,

none of which are helpful to the inquiry and all of which

are dicta.” Burkhart, 30 Vet. App. at 424 n.1.

Read as “an harmonious whole” with the entirety of

chapter 37, Brown & Williamson Tobacco Corp., 529 U.S.

at 133, the incontestability provision therefore cannot aid

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BURKHART v. WILKIE 11

Ms. Burkhart in her quest for a home loan guaranty. Sec-

tion 3721 operates (1) as to the loan guaranty between VA

and the lender and (2) only once a lender has actually is-

sued a loan.

C

Beyond her two statutory arguments, Ms. Burkhart as-

serts that the Veterans Court erred in declining to grant

her requested equitable relief. Again, we disagree.

Our recent decision in Burris v. Wilkie, 888 F.3d 1352

(Fed. Cir. 2018), addresses the limited scope of the Veter-

ans Court’s equitable powers. We reasoned that, through

38 U.S.C. § 503(b), Congress provided certain equitable

powers to the Secretary of Veterans Affairs—“including the

payment of moneys to any person whom the Secretary de-

termines is equitably entitled.” Id. at 1358 (citing

§ 503(b)). But it did not provide similar powers to the Vet-

erans Court, an Article I tribunal whose jurisdiction is lim-

ited by statute. Id. at 1357. These statutes “make clear

that the Veterans Court is statutorily permitted to review

Secretary decisions involving legal and factual questions

related to statutory benefits”—but not necessarily the “ex-

tra-statutory relief that [the Burris] Appellants” sought.

Id. at 1358. And, the fact that § 503(b) is “[t]he only provi-

sion in title 38 that addresses equitable relief in this con-

text,” indicates that Congress did not intend for the

Veterans Court’s jurisdiction to encompass such equitable

powers. Id.

Ms. Burkhart attempts to distinguish Burris because

there the appellants’ equitable requests were monetary,

whereas a home loan guaranty, she argues, is not—because

the beneficiary may never default. The Veterans Court cor-

rectly identified this as a distinction without a difference.

Burkhart, 30 Vet. App. at 426. A home loan guaranty that

will not provide a monetary benefit to the lender in the case

of default is of little use to the beneficiary or the lender. As

in Burris, where we held that a request for “equitabl[e]

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12 BURKHART v. WILKIE

tolling [of] the time limit for the benefit . . . is functionally

equivalent to one for retroactive [Dependents’ Education

Assistance] benefits,” 888 F.3d at 1357, a request for enti-

tlement to a home loan guaranty is also monetary in na-

ture.

Ms. Burkhart also claims that Burris does not apply to

her because she did not “suffer[ a] loss as a consequence of

reliance upon a determination by [VA] of eligibility or enti-

tlement to benefits.” 38 U.S.C. § 503(b). So, she says, she

is not seeking relief under § 503 and Burris does not gov-

ern. But the fact that Congress made only one express pro-

vision for the Secretary to grant equitable relief in limited

circumstances, in the form of § 503, indicates that it did so

to the exclusion of other exceptions for the Secretary’s eq-

uitable powers. See Hamdan v. Rumsfeld, 548 U.S. 557,

578 (2006) (“[A] negative inference may be drawn from the

exclusion of language from one statutory provision that is

included in other provisions of the same statute.”).

In sum, the Veterans Court provided a thorough anal-

ysis of Burris and correctly determined that neither that

precedent, nor any statute, would allow the Veterans Court

to “accept[] the appellant’s invitation to exercise equitable

power in this context [because it] would inappropriately ex-

pand [its] jurisdiction.” Burkhart, 30 Vet. App. at 425. Be-

cause we affirm the Veterans Court decision in this respect,

we decline to opine on the application of the equitable de-

fenses Ms. Burkhart asserted below.

III

We have considered Ms. Burkhart’s remaining argu-

ments and find them unpersuasive. By the plain language

of § 1151 and § 3702, Ms. Burkhart is ineligible for a VA

home loan guaranty. Further, the incontestability provi-

sion does not apply to her. Finally, the Veterans Court cor-

rectly determined it did not have jurisdiction to grant the

equitable relief she requested. We therefore affirm the

judgment of the Veterans Court.

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BURKHART v. WILKIE 13

AFFIRMED

No costs.