Perciavalle v. McDonough, 17-3766

Decision Date03 December 2021
Docket Number17-3766
PartiesRocco V. Perciavalle, Appellant, v. Denis McDonough, Secretary of Veterans Affairs, Appellee.
CourtUnited States Court of Appeals For Veterans Claims

Argued September 22, 2020

On Appellee's Motion for Full Court Review

Kenneth H. Dojaquez, of Topeka, Kansas, for the appellant.

Nathan P. Kirschner, with whom James M. Byrne, General Counsel Richard J. Hipolit, Deputy General Counsel; Mary AnnFlynn Chief Counsel; Christopher W. Wallace, Deputy Chief Counsel and ShereenM. Marcus, Appellate Attorney, all of Washington, D.C., were on the brief for the appellee.

Before BARTLEY, Chief Judge, and PIETSCH, GREENBERG, ALLEN, MEREDITH, TOTH, FALVEY, LAURER, and JAQUITH, Judges.

LAURER and JAQUITH, Judges, announced the judgment of the Court and filed the opinion of the Court with respect to Parts I-IV, in which BARTLEY, Chief Judge, and PIETSCH, GREENBERG, and TOTH, Judges, joined; and filed an opinion in Part V. TOTH, Judge, filed an opinion concurring with Part V. ALLEN, Judge, filed an opinion concurring in the judgment, in which MEREDITH and FALVEY, Judges, joined. BARTLEY, Chief Judge, filed an opinion dissenting in the judgment, in which PIETSCH and GREENBERG, Judges, joined.

OPINION

LAURER AND JAQUITH, JUDGES

U.S. Army veteran Rocco V. Perciavalle appeals, through counsel, a September 18, 2017, decision by the Board of Veterans' Appeals (Board) finding no clear and unmistakable error (CUE) in a 1971 rating decision and denying, as a matter of law, his motion to revise the rating decision. In a panel decision issued on September 27, 2019, the Court reversed the Board's determination that his CUE motion was prohibited as a matter of law because it depended on a changed interpretation of law, and the Court remanded for further adjudication. Perciavalle v. Wilkie, 32 Vet.App. 59 (2019). The Secretary timely moved for reconsideration or, in the alternative, full court review. Based on this motion, the case was submitted to the Court for en banc consideration.[1]

The dispute centers on whether the appellant's CUE motion was based on a change in the interpretation of law and on whether any Board error in deciding that question was prejudicial. A majority of the Court agrees that the Board was wrong in denying Mr. Perciavalle's appeal as a matter of law. However, a different majority concludes that the proper remedy here is to still affirm the Board decision.[2] In our view, despite Board error in characterizing a later interpretation of an existing regulation as the only basis on which appellant asserted CUE and denying his CUE assertion as a matter of law, the only possible outcome was the Board's ultimate conclusion that VA did not commit CUE in the 1971 rating decision. So we would affirm the September 2017 Board decision for lack of prejudicial error.

I. BACKGROUND

Mr. Perciavalle served honorably in the Army from 1962 to 1964 as a field artillery unit commander. R. at 525. He injured his left knee during service playing football at Fort Sill, Oklahoma. Record (R.) at 514, 535. In May 1966, the veteran submitted a claim for disability compensation based on his knee injury, which had required surgery. R. at 534-37. He described the nature of the injury as "removed cartilage anterior cruciate ligament & removed bone chip." R. at 535. In August 1966, a physician conducted an orthopedic examination as part of the veteran's disability evaluation. The veteran said that his left knee was "not back to normal," had a "tendency to give away at times," and bothered him going up and down stairs. R. at 512. The physician described the original diagnosis as "a torn left medial meniscus and injury to the left anterior cruciate ligament and stellate fragmentation of cartilage of [the] left femoral medial condyle," and the surgery as a "left medial meniscectomy." R. at 514. The physician diagnosed postoperative residuals and moderate anteroposterior (AP) relaxation. Id. He found that Mr. Perciavalle's left knee did not present "lateral relaxation, tenderness, crepitus, swelling, effusion, or limitation of motion," and noted that his leg had normal power and reflexes, he could squat fully, he walked without a limp, and his left thigh had improved from 1 inch smaller in circumference than the right to Va inch smaller. Id.

In September 1966, VA awarded service connection for the residuals of the veteran's left knee injury. R. at 509. The rating decision stated: "Current VA exam shows weakness and feeling of [instability] of left knee. The operative scar is asymptomatic. There is moderate AP relaxation. There is slight fullness of the infrapatellar fat pad. No other functional impairment is shown." Id. Mr. Perciavalle's disability was given a 10% rating for a medial meniscectomy under Diagnostic Code (DC) 5259. Id.

The veteran had another disability examination in July 1971. He reported some discomfort and weakness ascending and descending steps. R. at 496. An x-ray report reflected: "Left Knee: The joint space is questionably narrowed medially and there does appear to be some slight blunting of the tibial spines. On one view there is a question of nodular irregularity of the medial condyle of the femur." R. at 492. The physician found that the veteran's left knee had normal extension, flexion to 135 degrees, and no swelling or functional deficit, and that he had no quadriceps atrophy or weakness. R. at 495. However, the physician noted "very slight instability of [the] joint laterally." Id. He diagnosed minimal residual effects of the veteran's injury. R. at 496.

The evaluation report was referred to a rating board, which promptly determined and advised Mr. Perciavalle that: "The evidence does not warrant any change in the previous determination. Your knee condition remains 10% disabling and you will continue to receive compensation for this disability." R. at 490. The veteran did not appeal this decision, and it became final.

In February 1994, the Court decided Esteban v. Brown, holding that separate ratings were warranted for disfiguring facial scars, painful facial scars, and facial muscle damage resulting in mastication problems because "none of the symptomatology for any one of these three conditions is duplicative of or overlapping with the symptomatology of the other two conditions." 6 Vet.App. 259, 262 (1994).

In July 1997, VA's General Counsel (GC) issued a precedent opinion holding that "[a] claimant who has arthritis and instability of the knee may be rated separately under diagnostic codes 5003 and 5257." VA Gen. Couns. Prec. 23-97 (July 1, 1997), https://www.va.gov/ogc /opinions/l997precedentopinions.asp; see R. at 55-56.

In March 2015, the veteran asked the VA regional office (RO) to revise the July 1971 decision, asserting that it contained CUE. R. at 101-102. He contended that he should have received two separate 10% ratings for his knee disability, one "for slight instability of his left knee under Diagnostic Code (DC) 5257 and a separate 10% for limitation of motion of flexion and discomfort (pain) secondary to arthritis under DC 5003-5260." R. at 101-02.

In September 2015, the RO denied the CUE motion, determining that no revision of the July 1971 decision was warranted "because the decision was properly based on the available evidence of record and the rules in effect at the time the issue was considered." R. at 94. The appellant filed his Notice of Disagreement that same month. R. at 76-77. A May 2017 Statement of the Case (SOC) continued the denial of the CUE motion because the 1971 rating decision predated the VA GC opinion that allowed VA "to assign separate evaluations for instability and limitation of motion." R. at 58. Mr. Perciavalle appealed to the Board 3 days later. R. at 25.

In August 2017, the veteran submitted a letter brief to the Board, reiterating his position that he should have been awarded separate ratings in 1971 for his left knee. R. at 13-15. He emphasized that his theory of CUE was not based on a change of law during the 1990s; it was based on the incorrect application of the law as it existed when the rating decision was made in 1971. Id.

In September 2017, the Board relied on 38 C.F.R. § 20.1403(e) to deny Mr. Perciavalle's CUE motion, saying:

The Veteran has not provided any evidence that, in July 1971, VA interpreted the rating schedule to allow for separate ratings for limitation of motion and instability of the same knee. Instead, the Veteran contends that a more recent interpretation of VA regulations should have retroactive effect. . . . Because a later interpretation of an existing regulation cannot constitute CUE and that is the only basis on which the Veteran asserts CUE, the Veteran's motion must be denied as a matter of law.

R. at 5-6. This appeal followed.

On September 27, 2019, a panel of this Court reversed and vacated the Board decision, remanding the matter for further adjudication. Perciavalle, 32 Vet.App. at 59. The panel determined that neither Esteban nor the VA GC opinion was a change in interpretation because a changed interpretation necessarily requires the existence of an antecedent interpretation from which a later interpretation departs, and no such prior interpretation existed. The panel also found the Board's error prejudicial because it prevented Mr. Perciavalle from receiving a meaningful opportunity to participate in the adjudicative process.

On October 18, 2019, the Secretary filed a motion for reconsideration or, in the alternative, full court review. The panel denied reconsideration, and on May 11, 2020, the case was submitted to the Court for en banc consideration.

II. PARTIES' ARGUMENTS

Mr Perciavalle argues that there was CUE in the 1971 RO decision and the Board's contrary conclusion was ...

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