Citation Nr: 0827058 Decision Date: 08/11/08 Archive Date: 08/18/08 DOCKET NO. 06-24 327 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Los Angeles, California THE ISSUE Entitlement to enhanced dependency and indemnity compensation (DIC) benefits. REPRESENTATION Appellant represented by: Daniel D. Wedemeyer, attorney ATTORNEY FOR THE BOARD Michael Martin, Counsel INTRODUCTION The veteran had active service from July 1944 to May 1946. He died in November 1982. The appellant is his surviving spouse. This matter came before the Board of Veterans Appeals (Board) on appeal from an August 2000 rating decision by the Department of Veterans Affairs (VA) Regional Office (RO) in Los Angeles, California, which found that clear and unmistakable error (CUE) was not present in a January 18, 1980, rating decision that denied service connection for a hernia and thrombophlebitis. In a May 2001 decision, the Board denied service connection for a hernia and thrombophlebitis for accrued benefits purposes on the basis of CUE in the January 18, 1990, rating decision. The appellant appealed this decision to the United States Court of Appeals for Veterans Claims (Court). By a May 2002 Order, the Court, pursuant to a Joint Motion, vacated the Board's decision to the extent it failed to address the appellant's reasonably raised claim for enhanced DIC benefits. The Joint Motion stated that the parties agreed that the CUE claim should be deemed abandoned. See Pg. 4 of Joint Motion. Regarding the issue of entitlement to enhanced DIC benefits, the Board acknowledged previously that, as noted in the Joint Motion, the appellant submitted a statement in August 1999 in which she asserted that she was receiving DIC payments based on 38 U.S.C.A. § 1151 and requested that VA review the veteran's file and grant DIC under 38 U.S.C.A. § 1318. She asserted that she firmly believed that the veteran should have been rated at the 100 percent rate for 10 or more years due to total individual unemployability. By correspondence dated later in August 1999, the RO informed the appellant that they had received her claim for enhanced DIC benefits, but that a decision on this claim was being deferred pending the completion of litigation in the case of Hix v. West, 12 Vet. App. 138 (1999). In her September 2000 Notice of Disagreement regarding the CUE claim, the appellant stated, in part, that she felt service connection should have been granted for the veteran's inguinal hernia and phlebitis during his lifetime, that granting such would have resulted in a 100 percent rating for more than 10 years prior to his death, and, therefore, she would have received DIC with additional allowance for being rated at 100 percent for more than 8 years. Similarly, on her September 2000 VA Form 9, Appeal to the Board, the appellant stated, in part, that if the VA had rated the veteran correctly, he would have been rated at 100 percent for over 10 years prior to his death. As part of the appellant's April 2002 brief to the Court, it was contended, in part, that the Board erred by not adjudicating her plainly raised claim for enhanced DIC benefits. Moreover, as stated above, the Court, pursuant to a joint motion, vacated the Board's May 2001 decision to the extent it failed to provide adequate reasons and bases for the appellant's reasonably raised claim for enhanced DIC benefits. Thereafter, in a November 2002 statement, the appellant's attorney contended that the Board should direct the RO to immediately adjudicate the appellant's claim for enhanced DIC benefits. In a remand order dated in December 2002, the Board remanded the case for the RO to consider this issue in the first instance. Subsequently, in March 2007, the Board again remanded the case for the purpose of having the RO readjudicate the claim in light of a recent Court decision. The case has now been returned to the Board for further appellate review. FINDINGS OF FACT 1. The veteran died in November 1982, at the age of 57 years. 2. During his lifetime, the veteran established service connection for partial resection of the small bowel, rated as 40 percent disabling effective from December 30, 1958; residuals of a shell fragment wound of the left kidney with nephrolithiasis, rated as 30 percent disabling from September 18, 1979, and rated previously as noncompensably disabling from March 1, 1953; residuals of shell fragment wound Muscle Group XIX, moderate, abdomen, rated as 10 percent disabling effective from March 1, 1953; removal of the right testicle, rated as 10 percent disabling effective from March 1, 1953; a laceration of the bladder, rated as 10 percent effective from March 1, 1953; laceration of the urethra, rated as noncompensably disabling; postoperative residuals of the large bowel, rated as noncompensably disabling. A combined rating of 70 percent had been in effect since September 18, 1979, and a prior combined rating of 60 percent had been in effect since December 30, 1958. The veteran had a total disability rating based on individual unemployability effective from September 18, 1979. 3. DIC benefits have been awarded under 38 U.S.C.A. § 1151. 4. The appellant has submitted a claim for enhanced DIC benefits under 38 U.S.C.A. § 1311 based on hypothetical entitlement to a total disability rating for a continuous period of at least 8 years prior to death. 5. The appellant does not allege clear and unmistakable error in any prior decision pertaining to the ratings for the veteran's service-connected disabilities. CONCLUSION OF LAW The criteria for entitlement to increased DIC under 38 U.S.C.A. § 1311 based on entitlement to a total disability rating for a continuous period of at least 8 years prior to death are not met. 38 U.S.C.A. § 1311 (West 2002); 38 C.F.R. § 20.1106 (2007). REASONS AND BASES FOR FINDINGS AND CONCLUSION The appellant contends that the RO made a mistake by denying entitlement to increased DIC based on hypothetical entitlement of the veteran to a total disability rating for a continuous period prior to death. She asserts that he was disabled and that he should have had a 100 percent rating for at least eight years prior to his death. The Veterans Claims Assistance Act of 2000 (VCAA) defines the obligations of the VA with respect to the duty to assist claimants in the development of their claims. First, the VA has a duty to notify the appellant and representative, if represented, of any information and evidence needed to substantiate and complete a claim. 38 U.S.C.A. §§ 5102 and 5103. Second, the VA has a duty to assist the appellant in obtaining evidence necessary to substantiate the claim. 38 U.S.C.A. § 5103A. The VA has promulgated revised regulations to implement these changes in the law. See 38 C.F.R §§ 3.102, 3.156(a), 3.159 and 3.326(a)). The Board finds that the VA's duties under the law and implementing regulations have been fulfilled. An appropriate notification letter was provided to the appellant in November 2003. Moreover, as the appellant is represented by an attorney, any deficiency in the notification letter would be harmless as the attorney would have knowledge of the elements need to establish a claim, etc. The Board also finds that all relevant facts have been properly developed, and that all evidence necessary for equitable resolution of the issue on appeal has been obtained. As will be explained more fully below, the development of evidence in a case such as this is very limited as the claim for hypothetical entitlement is to be evaluated based on the evidence which is of record at the time of the veteran's death, or evidence of which the VA had control as of the date of death. Therefore, no further assistance to the appellant with the development of evidence is required. In the circumstances of this case, a remand to have the RO take additional action under the VCAA and implementing regulations would serve no useful purpose. See Sabonis v. Brown, 6 Vet. App. 426, 430 (1994) (remands which would only result in unnecessarily imposing additional burdens on the VA with no benefit flowing to the veteran are to be avoided). The VA has satisfied its obligation to notify and assist the claimant in this case. Further development and further expending of the VA's resources are not warranted. Taking these factors into consideration, there is no prejudice to the claimant in proceeding to consider the claim on the merits. See Bernard v. Brown, 4 Vet. App. 384, 394 (1993). During his lifetime, the veteran established service connection for partial resection of the small bowel, rated as 40 percent disabling effective from December 30, 1958; residuals of a shell fragment wound of the left kidney with nephrolithiasis, rated as 30 percent disabling from September 18, 1979, and rated previously as noncompensably disabling from March 1, 1953; residuals of shell fragment wound Muscle Group XIX, moderate, abdomen, rated as 10 percent disabling effective from March 1, 1953; removal of the right testicle, rated as 10 percent disabling effective from March 1, 1953; a laceration of the bladder, rated as 10 percent effective from March 1, 1953; laceration of the urethra, rated as noncompensably disabling; postoperative residuals of the large bowel, rated as noncompensably disabling. A combined rating of 70 percent had been in effect since September 18, 1979, and a prior combined rating of 60 percent had been in effect since December 30, 1958. The veteran had a total disability rating based on individual unemployability effective from September 18, 1979. The veteran died in November 1982, at the age of 57 years. DIC benefits have been awarded under 38 U.S.C.A. § 1151. The appellant has submitted a claim for enhanced DIC benefits under 38 U.S.C.A. § 1311 based on hypothetical entitlement to a total disability rating for a continuous period of at least 8 years prior to death. The RO subsequently denied the claim on the basis that the veteran had been rated as 100 percent disabled for a period of less than eight years. The appellant has perfected an appeal of that decision. Under 38 U.S.C.A. § 1311(a)(2), the rate of dependency and indemnity compensation paid to a surviving spouse may be increased in the case of a veteran who at the time of death was in receipt or was entitled to receive (or but for the receipt of retired pay or retirement pay was entitled to receive) compensation for a service-connected disability that was rated totally disabling for a continuous period of at least 8 years immediately preceding death. In determining the period of a veteran's disability for purposes of the preceding sentence, only periods in which the veteran was married to the surviving spouse shall be considered. The Board notes that a regulation pertaining to claims for increased DIC under 38 U.S.C.A. § 1311 was revised during the course of this appeal. In a document published in the Federal Register on December 21, 2001 (66 FR 65861), VA proposed to amend the practice rule concerning claims for death benefits by survivors of veterans. The rule stated that, with certain exceptions, issues involved in a survivor's claim for death benefits will be decided without regard to any prior disposition of those issues during the veteran's lifetime. The VA proposed to add an exception to clarify that this rule does not apply to claims for "enhanced'' DIC under 38 U.S.C. 1311(a)(2). This amendment was necessary to comply with the order of the United States Court of Appeals for the Federal Circuit in National Organization of Veterans' Advocates, Inc. v. Secretary of Veterans Affairs, 260 F.3d 1365 (Fed. Cir. 2001) (NOVA). In the case, the court noted that Sec. 20.1106 was apparently inconsistent with another VA regulation, 38 CFR 3.22. The Court ordered VA to issue regulations to either remove or explain the apparent inconsistency. In the NOVA decision, the Federal Circuit concluded that 38 CFR 3.22 and 38 CFR 20.1106 stated apparently inconsistent interpretations of virtually identical statutes codified at 38 U.S.C. 1318(b) and 38 U.S.C. 1311(a)(2), respectively. Both statutes authorize payment of certain DIC benefits to survivors of veterans who were, at the time of death ``entitled to receive'' disability compensation for a service-connected disability that was rated totally disabling for a specified number of years immediately preceding death. The court concluded that Sec. 3.22 interprets 38 U.S.C. 1318(b) as providing that the question of whether the veteran was ``entitled to receive'' such benefits would be governed by VA decisions during the veteran's lifetime, except where such decisions are found to contain a clear and unmistakable error (CUE). The court concluded that Sec. 20.1106 interprets 38 U.S.C. 1311(a)(2), as requiring VA to disregard all decisions during the veteran's lifetime. The court directed VA to conduct rulemaking to either revise one of its regulations to harmonize its interpretation of the statutes or to explain the basis for the apparent inconsistency in its interpretation of those statutes. In response to the Court's directive, the VA concluded that the language, context, and legislative history of 38 U.S.C. 1318(b) and 38 U.S.C. 1311(a)(2), viewed together, clearly evinced Congress's intent to authorize DIC only in cases where the veteran's entitlement to total disability compensation for the specified number of years prior to death was established by ratings during the veteran's lifetime or by correction of CUE in such decisions. Accordingly, 38 C.F.R. § 20.1106 was amended to clarify that, as with decisions under 38 U.S.C. 1318, decisions under 38 U.S.C. 1311(a)(2) will be decided taking into consideration prior dispositions made during the veteran's lifetime of issues involved in the survivor's claim. The effect of this change was to make VA's position clear that entitlement to benefits under either 38 U.S.C. 1318 or 38 U.S.C. 1311 must be based on the determinations made during the veteran's lifetime, or challenges to such decisions on the basis of clear and unmistakable error, rather than on de novo posthumous determinations as to whether the veteran hypothetically could have been entitled to certain benefits if he or she had applied for them during his or her lifetime. See 67 Fed. Reg. 16317. The revision of section 20.1106 was not a "substantive" change. Rather, the change made to this section was part of an "interpretive rule" reflecting the Secretary's conclusion that VA has never been authorized, or had the authority, under section 1311 to award additional DIC benefits where the veteran merely had hypothetical, as opposed to actual, entitlement to compensation. In light of this position taken by the Secretary in the Supplementary Information that accompanied the rule changes, the Board finds that Karnas is not applicable in this situation, and that entitlement to section 1311 additional DIC benefits cannot be established by way of hypothetical entitlement, no matter when the claim was filed. The VA's interpretation is confirmed by the decision by the United States Court of Appeals for the Federal Circuit in National Organization of Veterans' Advocates, Inc. v. Secretary of Veterans Affairs, 314 F.3d 1373 (Fed. Cir. 2003) (NOVA II) in which that Court stated that: The Department should also continue to process claims for survivor benefits that would be rejected because they are based on the filing of new claims after the veteran's death, since we have found that the Department's interpretation of the statue as barring such claims is permissible and reasonable... More recently, the United States Court of Appeals for the Federal Circuit reviewed the case law governing retroactive application of changes in law and held that the amended version of section 3.22 could be applied to claims pending prior to the amendment in January 2000, as this claim was. Rodriguez v. Peake, No. 2006-7023 (Fed. Cir. 2007). Applying these principles to the present case, the Board finds initially that the RO was correct in noting that the veteran had not been rated as 100 percent disabling during the eight years preceding his death. In addition, the Board notes that there is no indication that he would have been rated as 100 percent disabled except for clear and unmistakable error in a prior decision. In this regard, the appellant has not alleged any clear and unmistakable error in any prior decision. In a Joint Motion dated in May 2002, the parties agreed that a claim of clear and unmistakable error in a rating of January 1980 had been abandoned. Rather, her claim is based on hypothetical entitlement during his lifetime. She asserts that medical evidence which is of record shows that he had been unemployable for at least eight years before his death. Significantly, however, as is discussed above, a claim for DIC based on hypothetical entitlement is precluded by the terms of the revised version of 38 C.F.R. § 20.1106. As already noted, the Courts have held that "hypothetical entitlement" as an additional basis for establishing eligibility to enhanced DIC benefits is prohibited regardless of when the claim is filed. For the foregoing reasons, the Board finds that the claim for additional DIC under 38 U.S.C.A. § 1311 based on hypothetical entitlement to a total disability rating for a continuous period of at least 8 years prior to death must be denied as a matter of law. ORDER Entitlement to additional DIC under 38 U.S.C.A. § 1311 based on entitlement to a total disability rating for a continuous period of at least 8 years prior to death is denied. ____________________________________________ L. M. BARNARD Acting Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs