638 F.2d 1218
Norma DENTON, Plaintiff-Appellant,
UNITED STATES of America, Defendant-Appellee.
United States Court of Appeals,
Argued and Submitted Oct. 15, 1980.
Decided Feb. 5, 1981.
Alan L. Froelich, Wendells, Froelich, Power & Lakefish, Seattle, Wash., for plaintiff-appellant.
Robert M. Hollis, Dept. of Justice, Washington, D.C., for defendant-appellee.
Appeal from the United States District Court for the Western District of Washington.
Before SKOPIL and ALARCON, Circuit Judges, and BURKE, District Judge.
ALARCON, Circuit Judge:
Plaintiff Norma Denton appeals from the district court's denial of her motion for summary judgment and grant of defendant's motion for summary judgment. We affirm.
This case chronicles the Kafkaesque plight of a hapless citizen whose claims to widow's benefits regrettably must be denied despite clear evidence that she has been the victim of bureaucratic error.
Appellant is the widow of Lieutenant Colonel Charles K. Denton. In 1962, Lt. Col. Denton transferred to the Retired Reserve of the United States Army, after having completed 28 years of military service with the National Guard. Had he lived, Lt. Col. Denton would have been eligible for retirement pay at age 60; Lt. Col. Denton died in 1975 at age 57. His widow was not entitled to any survivorship benefits because Lt. Col. Denton died before he was eligible to draw retirement pay.
In 1974, Congress amended the Veterans' Insurance Act to extend coverage under Servicemen's Group Life Insurance (SGLI) to individuals such as Lt. Col. Denton, who were members of the Retired Reserve of a uniformed service, who had completed at least 20 years of creditable service, but who had not yet received the first increment of retirement pay or reached the age of 61. Veterans' Insurance Act of 1974, § 4(1), 38 U.S.C. § 767(a)(3) (1977). All such individuals were entitled to purchase a SGLI policy providing full-time term life insurance coverage up to a maximum of $20,000.
Following enactment of the Veterans' Insurance Act of 1974, the Army attempted to notify all Retired Reservists eligible under the amended SGLI. In excess of 43,000 retired reservists were initially identified from the computer files as potentially eligible. The Army further refined the list by a review of the personnel files. The ultimate mailing was sent to more than 31,000 Retired Reservists. In addition, the Department of Defense and the Veterans' Administration distributed information about SGLI to various military organizations, veterans' organizations and Veterans' Administration regional offices.
Lt. Col. Denton did not receive the Army mailing because the data maintained in his computer file erroneously indicated that he was already a recipient of retired pay, and was therefore ineligible for SGLI coverage.
Following her husband's death, appellant filed suit against the United States in the Court of Claims to recover the $20,000 insurance proceeds to which she would have been entitled had her husband applied for full SGLI coverage and named her as beneficiary. She agreed to a set-off for the premiums her husband would have paid. The Court of Claims dismissed the suit for lack of subject matter jurisdiction. Thereafter, the Court of Claims, pursuant to 28 U.S.C. § 1506 (1977), transferred appellant's suit to the District Court for the Western District of Washington.
In the district court, appellant contended that the United States was liable for the $20,000 because the government had breached a statutory duty to notify her late husband of his SGLI eligibility. In the alternative, appellant contended that even if the United States had no statutory duty to notify her husband, it had voluntarily undertaken to notify Retired Reservists of their eligibility, and was therefore liable for any negligence in carrying out the task.
The district court found that Lt. Col. Denton would have purchased full SGLI coverage had he been aware of his eligibility. The court held, however, that the United States had no statutory duty to notify Lt. Col. Denton of his insurance eligibility, as well as no duty to perform the voluntarily undertaken task of notification with due care. Accordingly, the court dismissed appellant's suit for failure to state a claim upon which relief could be granted under Fed.R.Civ.P. 12(b)(6).
Both parties in the action below proceeded upon the assumption that the district court had jurisdiction under 38 U.S.C. § 775 (1977). That section of the Veterans' Benefits Statute states: "The district courts of the United States shall have original jurisdiction of any civil action or claim against the United States founded upon this subchapter." (Subchapter III, Servicemen's Group Life Insurance.)
We hold that jurisdiction under this statute was improper because the government's breach of duty, if any, was not the kind for which the United States is amenable to suit under 38 U.S.C. § 775.
Neither the Veterans' Insurance Act of 1974 nor the regulations promulgated under it (38 C.F.R. § 9.1 et seq. (1979)) sets forth an explicit duty to notify Retired Reservists of their SGLI eligibility. Nor do we believe that the legislative history can plausibly be read as imposing such a duty on the United States.
The United States' consent to be sued under § 775 extends only to actions alleging breach of an explicit or implicit duty under the SGLI subchapter. Nothing in the language of the SGLI subchapter nor in the legislative history supports appellant's contention that the statute imposed a duty of notification on the United States. Therefore, appellant's claim was not "founded upon" the SGLI subchapter and jurisdiction under § 775 was improper.
We emphasize that we do not hold that the United States had no duty to notify Lt. Col. Denton of his SGLI eligibility or that the United States, once having undertaken to notify Retired Reservists of their SGLI eligibility, cannot be held liable on a duty voluntarily undertaken theory. We need not decide those questions, for if the government has breached any duty here, it is a common law tort duty for which the United States is only amenable to suit under the Federal Tort Claims Act. 28 U.S.C. §§ 1346(b), 2674-2680 (1977).
Many strong policy arguments could be made for imposing a duty on the United States in this case. It is indeed unfortunate that under the theory urged by appellant, we are constrained to deny the relief requested.