Evans v. McDonald, 120214 USCAVC, 11-2917

Docket Nº11-2917
Opinion JudgeLance, Judge
Party NameRonald L. Evans, Appellant, v. Robert A. McDonald, Secretary of Veterans Affairs, Appellee.
AttorneySandra E. Booth, of Columbus, Ohio, was on the brief for the appellant. Landon E. Overby, of Providence, Rhode Island, argued before the Court. James R. Drysdale, with whom Will A. Gunn, General Counsel; R. Randall Campbell, Assistant General Counsel; and Richard Mayerick, Deputy Assistant Genera...
Judge PanelBefore Kasold, Chief Judge, and Hagel, Moorman, Lance, Davis, Schoelen, Pietsch, Bartley, and Greenberg, Judges. Schoelen, Judge, with whom Greenberg, Judge, joins, dissenting: Bartley, Judge, with whom Greenberg, Judge, joins in full, and Schoelen, Judge, joins as to part I, Dissenting
Case DateDecember 02, 2014
CourtCourt of Appeals for Veteran Claims

Ronald L. Evans, Appellant,

v.

Robert A. McDonald, Secretary of Veterans Affairs, Appellee.

No. 11-2917

United States Court of appeals For Veterans Claims

December 2, 2014

Argued August 13, 2014

On Appeal from the Board of Veterans' Appeals

Sandra E. Booth, of Columbus, Ohio, was on the brief for the appellant. Landon E. Overby, of Providence, Rhode Island, argued before the Court.

James R. Drysdale, with whom Will A. Gunn, General Counsel; R. Randall Campbell, Assistant General Counsel; and Richard Mayerick, Deputy Assistant General Counsel, were on the brief, all of Washington, D.C., for the appellee. [1]

Before Kasold, Chief Judge, and Hagel, Moorman, Lance, Davis, Schoelen, Pietsch, Bartley, and Greenberg, Judges.

Lance, Judge

The appellant, Ronald L. Evans, appeals through counsel a June 21, 2011, decision of the Board of Veterans' Appeals (Board) that found that an April 1988 rating decision, which granted the appellant service connection for post-traumatic stress disorder (PTSD) and assigned a 30% disability rating, did not contain clear and unmistakable error (CUE) for "failing to consider and grant entitlement to a total disability rating based on individual unemployability" (TDIU). Record (R.) at 3. This appeal is timely, and the Court has jurisdiction over the case pursuant to 38 U.S.C. §§ 7252(a) and 7266. The parties each filed briefs, and the appellant filed a reply brief. Thereafter, a three-judge panel of the Court heard oral argument in the case on January 28, 2014. On July 21, 2014, the case was submitted to the en banc Court pursuant to section VII(b)(2)(A) of the Court's Internal Operating Procedures, and the en banc Court heard oral argument on August 13, 2014. As the Board's determination that the April 1988 rating decision did not contain CUE is not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law, and because the Board provided an adequate statement of reasons or bases for its decision, the Court will affirm the June 21, 2011, Board decision.

I. FACTS

The appellant served in the U.S. Marine Corps from November 1973 to October 1975. R. at 1285.

Following service, on July 23, 1987, he filed a VA form 21-526, Veteran's Application for Compensation or Pension, seeking disability compensation benefits for PTSD. R. at 1133-36. In his application, he noted that he had worked as a foreman at "Day Lay Farms" in Raymond, Ohio, for one month when he "was let go since he was entering [the] hospital." R. at 1135. A September 1987 VA medical center (VAMC) discharge summary indicated that he had been admitted to the VAMC on July 27, 1987, for PTSD treatment and concluded

It is felt that the [appellant] is unemployable at this time in light of his continuing need for intensive out-patient treatment with the possibility of referral back for in-patient treatment should his out-patient therapist deem it appropriate. His employment status will be reassessed on a continuing basis as an out-patient and may be upgraded when felt appropriate.

R. at 1165.

In a November 1987 VA compensation and pension (C&P) examination, Paul Kirch, M.D., found the appellant coherent and logical and noted that his emotional reactions were appropriate. R. at 1146-47. Dr. Kirch also found the appellant competent and that his mental content revealed no delusions, hallucinations, or abnormal thought processes. Id. On January 12, 1988, the appellant underwent two VA C&P examinations. R. at 1128-29, 1130-31. In the first, Liberato Basobas, M.D., found the appellant anxious, tense, suspicious, guarded, evasive, and somewhat manipulative. R. at 1128-29. Dr. Basobas also found that the appellant's judgment and insight were fair, he was competent, and he denied hallucinations or delusions. Id. Dr. Basobas indicated the appellant's ability to attend group therapy for PTSD. Id. In the second January 1988 C&P examination, Souhair Garas, M.D., also stated that the appellant was able to attend group therapy for PTSD. R. at 1130-31.

In an April 1988 rating decision, the Cleveland, Ohio, VA regional office (RO) granted the appellant (1) benefits for PTSD, assigning a 30% disability rating effective July 23, 1987; (2) a temporary 100% disability rating, effective July 27, 1987, the date of his VAMC admission; and (3) a 30% disability rating, effective October 1, 1987, the date following his discharge from the VAMC. R. at 1111-13. Also in the April 1988 rating decision, the RO marked "yes" in box 17, entitled "EMPLOYABLE (Compensation only)." R. at 1111. The appellant did not appeal this decision, and it became final.

About 10 years later, in a November 1998 rating decision, the RO granted the appellant a 70% disability rating for PTSD, effective January 23, 1995.2 R. at 433 (July 2002 rating decision referring to the November 1998 rating decision). On December 4, 1998, he filed a VA form 21-8940, Veteran's Application for Increased Compensation Based on Unemployability. R. at 853-54. The RO granted him entitlement to TDIU, effective December 4, 1998, by a rating decision issued in December 1999. R. at 798-802. Thereafter, the RO increased the appellant's schedular disability rating for PTSD to 100%, effective January 23, 1995, and found CUE in the December 1999 rating decision for failing to grant TDIU effective January 23, 1995. R. at 430-37. Ultimately, in a December 2003 decision, the Board denied an effective date earlier than January 23, 1995, for the appellant's TDIU award. R. at 389-97.

On appeal, this Court issued an order in September 2006 setting aside the Board's December 2003 decision and dismissing the appeal, holding that the appellant's earlier effective date request, based on a failure of the April 1988 RO to adjudicate an informal claim for TDIU, had to be made in the context of a request for revision of the April 1988 rating decision based on CUE. Evans v. Nicholson, No. 04-744, 2006 WL 2805051 (Vet.App. Sept. 26, 2006). In accordance with the Court's order, the appellant filed a motion to revise the April 1988 rating decision, arguing that the RO committed CUE in failing to construe his July 23, 1987, PTSD claim to include a request for entitlement to TDIU. R. at 268-71. In August 2009, the RO determined that the appellant's 1987 claim did not include a request for TDIU and alternatively determined that TDIU remained denied because the appellant had not demonstrated CUE in that denial. R. at 160-69. The appellant perfected an appeal to the Board, R. at 26 (Apr. 2010 VA Form 9), 33-54 (Apr. 2010 Statement of the Case), 80-81 (Aug. 2009 Notice of Disagreement).

In the June 2011 decision on appeal, the Board determined that the April 1988 rating decision did not contain CUE. R. at 2-16. In doing so, it determined that the evidence before the RO in April 1988 reasonably raised the issue of entitlement to TDIU and further determined that the April 1988 decision implicitly denied TDIU. R. at 11-13. The Board further found that the appellant had reasonable notice that entitlement to TDIU had been denied, as "a reasonable person would have recognized that a 100% rating and a TDIU were effectively the same benefits, " and that the reduction of the 100% rating coupled with a substantial decrease in monthly benefits represented a denial of TDIU. R. at 12. Additionally, the Board found "that the RO implicitly determined that the [appellant] was not unemployable due to his PTSD, because the case was not submitted for extra-schedular consideration by VA's Director, Compensation and Pension Service." R. at 13. Hence the Board rejected the appellant's argument that the April 1988 rating decision was the product of CUE for failing to adjudicate the issue of TDIU. R. at 13.

As to the merits of TDIU, the Board found that a CUE challenge would nonetheless fail because "the evidence of record in April 1988 did not show that it was 'absolutely clear' or 'undebatable' that the [appellant] was unemployable due to his PTSD." R. at 13-14. The Board explained that, while "the evidence of record in April 1988 contained medical evidence indicating that the [appellant] was unemployable, the record also contained other medical evidence from which the RO could have concluded that he was not unemployable, " referencing the November 1987 and January 1988 C&P opinions. R. at 14. This appeal followed.

II. THE PARTIES' ARGUMENTS

The appellant first argues that the Board erred by holding that an implicit denial is a complete defense to a CUE request. Appellant's Brief (Br.) at 13-15; Reply Br. at 2-3. The Secretary responds that the Board did not conclude that an implicitly denied claim necessarily bars all CUE challenges. Secretary's Br. at 7-9. Second, the appellant contends that the Board erred when it determined that a motion alleging CUE must "show entitlement to reversal and a grant of benefits as a condition precedent to CUE relief based on an unadjudicated claim theory." Appellant's Br. at 15-23; Reply Br. at 3-13. Specifically, he argues that 38 C.F.R. § 4.16(b) was misapplied and that the Board should have found that the RO clearly and unmistakably should have referred his case to the C&P Director and that such an outcome here would have resulted in a "manifest change in outcome, " even though referral itself does not result in a grant of benefits. Appellant's Br. at 18-23. The Secretary responds that a Board finding that a claim was adjudicated and implicitly denied permits a challenge based on CUE, but that the appellant must still provide persuasive reasons as to why the result would have been manifestly different but for the alleged error. Secretary's Br. at 9-13. He further argues that the appellant's assertion that he need not demonstrate that the actual outcome would have been manifestly different...

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