Oregon Health Authority v. Cue

38 USC section 5301(a)(1) does not preclude a state hospital from seeking reimbursement for the past costs of maintenance and care from a deceased veteran's benefits.

Defendant appealed the trial court’s grant of OHA’s motion for summary judgment. Defendant assigned error the the court’s finding that federal law does not preclude OHA’s request for reimbursement from the estate of a deceased veteran who was committed to the Oregon State Hospital. Defendant argued that the trial court erred in its judgment because veteran’s benefits are “exempt from the claims of creditors” under 38 USC section 5301(a)(1). OHA argued section 5301(a)(1) is not applicable because it is a state institution seeking reimbursement, not a creditor. “Payments of [veteran]benefits due or to become due under any law administered by the Secretary shall not be assignable … and such payments made to … a beneficiary… shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary.” 38 USC section 5301(a)(1). The Court of Appeals took up this case to determine whether or not the 5301(a)(1) exemption applies after the death of the beneficiary, which the Court acknowledged was a novel issue in Oregon case law. The Court held that OHA is permitted to seek reimbursement because veteran benefits are intended for the “care and maintenance of veterans” and payment to state institution fits that purpose. Affirmed.