Citation Nr: 0827632 Decision Date: 08/15/08 Archive Date: 08/22/08 DOCKET NO. 04-42 737 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Los Angeles, California THE ISSUES 1. Entitlement to enhanced Dependency and Indemnity Compensation (DIC) under 38 U.S.C.A. § 1311(a)(2). 2. Entitlement to increased retroactive Dependency and Indemnity Compensation (DIC) payment rates. REPRESENTATION Appellant represented by: Daniel D. Wedemeyer, Attorney ATTORNEY FOR THE BOARD M. Hannan, Counsel INTRODUCTION The veteran served on active duty from August 1951 July 1955. The veteran died in March 1997, and the appellant is his surviving spouse. This case comes before the Board of Veterans' Appeals (Board) on appeal from actions taken by the Department of Veterans Affairs (VA) Regional Office (RO) in Los Angeles, California. In September 2002, pursuant to an August 2002 Board decision, the RO issued a rating decision that granted service connection for the cause of the veteran's death and assigned an initial monetary award amount due to the appellant. In a November 2002 letter, the appellant's attorney contended that the appellant was entitled to increased ('enhanced') Dependency and Indemnity Compensation (DIC) benefits under 38 U.S.C.A. § 1311(a)(2). The RO denied the appellant's claim for enhanced DIC benefits under 38 U.S.C.A. § 1311 in a rating decision issued in November 2003. The appellant has appealed that determination and she also contends that the monetary rates used by the RO to calculate the amount of her retroactive award of DIC benefits were incorrect. FINDINGS OF FACT 1. The veteran did not have a service connected disability which was rated totally disabling for at least 8 years prior to his death in March 1997. 2. The appellant's claim for enhanced DIC benefits brought under the provisions of 38 U.S.C.A. § 1311(a)(2), was pending as of January 21, 2000, and December 2, 2005, but a previously applicable legal theory of "hypothetical" entitlement to benefits under 38 U.S.C.A. § 1311(a)(2) is not applicable and the provisions of 38 C.F.R. § 3.10(f)(3) must be applied to this case, as those provisions are analogous to provisions under 38 C.F.R. § 3.22, which implement entitlement to DIC benefits under 38 U.S.C.A. § 1318, and 38 C.F.R. § 3.22 has recently been found to have no unlawful retroactive effect pursuant to the holding of the United States Court of Appeals for the Federal Circuit (Federal Circuit) in Rodriguez v. Peake, 511 F.3d 1147 (Fed. Cir. 2008). 3. The appellant was paid past due DIC benefits according to the monthly entitlement amounts specified by statute with a progressive calculation according to statute beginning on April 1, 1997. CONCLUSIONS OF LAW 1. The veteran died of a service connected disease. 38 U.S.C.A. § 1310 (West 2002 & Supp. 2007); 38 C.F.R. § 3.312 (2007). 2. The appellant has no legal entitlement to enhanced DIC benefits under the provisions of 38 U.S.C.A. § 1311(a)(2). 38 U.S.C.A. § 1311(a)(2) (West 2002 & Supp. 2007); 38 C.F.R. § 3.10(f)(3) (2007); Sabonis v. Brown, 6 Vet. App. 426 (1994); Rodriguez v. Peake, 511 F.3d 1147 (Fed. Cir. 2008). 3. Entitlement to additional retroactive compensation payment based on the award of DIC is not authorized as a matter of law. 38 U.S.C.A. §§ 1303, 1304, 1310, 1311 (West 2002 & Supp. 2007); 38 C.F.R. § 3.21 (2007). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS VA's Duties to Notify and Assist As provided for by the Veterans Claims Assistance Act of 2000 (VCAA), the United States Department of Veterans Affairs (VA) has a duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2007); 38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.326(a) (2007). However, the VCAA is not applicable in cases such as this one, where further assistance would not aid the appellant in substantiating her claims. Wensch v. Principi, 15 Vet App 362 (2001); see 38 U.S.C.A. § 5103A(a)(2) (Secretary not required to provide assistance "if no reasonable possibility exists that such assistance would aid in substantiating the claim"); see also VAOPGCPREC 5-2004; 69 Fed. Reg. 59989 (2004) (holding that the notice and duty to assist provisions of the VCAA do not apply to claims that could not be substantiated through such notice and assistance). With respect to the appellant's claim of entitlement to increased DIC under to the provisions of 38 U.S.C.A. § 1131, as well as her claim of an increased retroactive award, the Board has determined that there is no legal entitlement to the claimed benefits as a matter of law. The notice provisions and duty to assist provisions are not applicable to a claim, where the claim cannot be substantiated because there is no legal basis for the claim or because undisputed facts render the claimant ineligible for the claimed benefit. VAOPGCPREC 5-2004 (June 23, 2004). These matters involve an inquiry based upon the evidence of record prior to the veteran's death and not based upon the development of new evidence, although such development was undertaken in this case. As there is no dispute as to the underlying facts of this case, and as the Board has denied the claims as a matter of law, the notice and duty to assist provisions are inapplicable. See e.g., Livesay v. Principi, 15 Vet. App. 165, 179 (2001) (en banc); Wensch v. Principi, 15 Vet. App. 362 (2001). In this case, neither VCAA notice nor the VCAA duty to assist applies because the issues presented are solely ones of statutory interpretation and the claims are barred as a matter of law. See Smith v. Gober, 14 Vet. App. 227, 230 (2000) (claim that a Federal statute provides for payment of interest on past-due benefits), aff'd, 281 F.3d 1384 (Fed. Cir. 2002), cert. denied, 537 U.S. 821 (2002). Indeed, this case involves the issue of calculation of VA compensation benefits and the pertinent facts are not in dispute. See Manning v. Principi, 16 Vet. App. 534 (2002) (holding that the VCAA has no effect on an appeal where the law, and not the underlying facts or development of the facts, is dispositive of the matter). Given the foregoing, there is no issue as to whether VA has complied with its duty to notify the appellant of her duties to obtain evidence, see Quartuccio v. Principi, 16 Vet. App. 183 (2002), and the Board finds that there is no reasonable possibility that any further assistance would aid the appellant in substantiating her claims for increased DIC benefits, whether pursuant to 38 U.S.C.A. § 1311(a)(2) or on a retroactive basis. 38 U.S.C.A. §§ 5102, 5103 and 5103A; Sabonis v. Brown, 6 Vet. App. 426, 430 (1994) (remands which would only result in unnecessarily imposing additional burdens on VA with no benefit flowing to an appellant are to be avoided). Moreover, neither the appellant nor her attorney has indicated that she has any additional evidence to offer or identify in support of either claim. Accordingly, it is not prejudicial for the Board to decide the issues on appeal without further development. Bernard v. Brown, 4 Vet. App. 384 (1993). The Merits of the Claims In adjudicating a claim, the Board determines whether (1) the weight of the evidence supports the claim or, (2) whether the weight of the "positive" evidence in favor of the claim is in relative balance with the weight of the "negative" evidence against the claim. The appellant prevails in either event. However, if the weight of the evidence is against the appellant's claim, the claim must be denied. 38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102; Gilbert v. Derwinski, 1 Vet. App. 49 (1990). A. 38 U.S.C. § 1311 claim In this case, the appellant and her attorney argue that the appellant is entitled to additional monthly DIC benefit under the provisions of 38 U.S.C. § 1311(a)(2). However, as will be explained below, the Board concludes that a recent decision of the Federal Circuit governs the outcome of this case and that that decision has rendered a previously applicable legal theory of "hypothetical" entitlement to benefits under 38 U.S.C.A. § 1311(a)(2) inapplicable in cases such as this one. Rodriguez v. Peake, 511 F.3d 1147 (Fed. Cir. 2008). Instead, the provisions of 38 C.F.R. § 3.10(f)(3) must be applied to this case, as those provisions are analogous to provisions under 38 C.F.R. § 3.22, which implement entitlement to DIC benefits under 38 U.S.C. § 1318, and the Federal Circuit has found that 38 C.F.R. § 3.22 has no unlawful retroactive effect, and should be applied to cases that were pending prior to January 21, 2000, when amendments to 38 C.F.R. § 3.22 were made which eliminated a judicial interpretation of the prior version of 38 C.F.R. § 3.22 by the United States Court of Appeals for Veterans Claims (Court) that allowed for a theory of "hypothetical" entitlement to DIC benefits under 38 U.S.C. § 1318. Dependency indemnity and compensation (DIC) is payable to a veteran's surviving spouse, when the veteran dies from a service connected disability. 38 U.S.C. § 1310; 38 C.F.R. § 3.5(a). VA will pay an increased amount of, or "enhanced", DIC benefits to the surviving spouse of a deceased veteran who, at the time of death, was in receipt of or 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 eight years immediately preceding death. In determining the period of a veteran's disability for purposes of the preceding sentence, only the period in which the veteran was married to the surviving spouse shall be considered. 38 U.S.C. § 1311(a)(2). When a veteran's death occurred on or after January 1, 1993, section 3.10(b) of VA regulations provides that the monthly rate of DIC for a surviving spouse shall be the amount set forth in 38 U.S.C.A. § 1311(a)(1). This rate shall be increased by the amount set forth in 38 U.S.C.A. § 1311(a)(2) when, as indicated above, the veteran had a service-connected disability evaluated as totally disabling for a continuous period of at least eight years immediately preceding death. 38 C.F.R. § 3.10(c). On January 21, 2000, section 3.22--which implements a statutory provision similar to section 1311(a)(2), i.e., 38 U.S.C.A. § 1318, which governs entitlement to DIC benefits for surviving spouses of veterans who were "entitled to receive" compensation for service-connected disability that was rated as totally disabling for a continuous period of at least ten years prior to death--was amended to define the statutory term "entitled to receive" so as to exclude "hypothetical" entitlement to DIC benefits previously recognized by the Court. In Hix v. Gober, 225 F. 3d 1377 (Fed. Cir. 2000), the Federal Circuit held that for the purpose of determining whether a survivor is entitled to enhanced DIC benefits under 38 U.S.C. § 1311(a)(2) (veteran required to have been rated totally disabled for a continuous period of eight years prior to death), section 20.1106, as it was written at the time of the Hix decision, permitted VA to consider whether the veteran, although not actually in receipt of compensation for disability evaluated as totally disabling for the requisite period of time, was nonetheless "hypothetically" entitled to receive such compensation based upon a de novo review of the evidence on file. Following the issuance of the Federal Circuit's opinion in Hix, the Board sought a VA General Counsel opinion with regard to the evidence to be considered in determinations of hypothetical entitlement for purposes of 38 U.S.C. § 1311(a)(2). In December 2000, the VA General Counsel issued a precedential opinion which found that the Federal Circuit's language in the Hix opinion regarding consideration of new evidence presented by the surviving spouse was obiter dictum (i.e., words of an opinion entirely unnecessary for the decision of the case) and not binding precedent as to claims for DIC under 38 U.S.C. § 1311(a)(2) because the specific holding of the Federal Circuit was to affirm the Court's earlier decision in Hix authorizing consideration of entitlement to additional DIC benefits on a "hypothetical" theory. See VAOPGCPREC 9-2000. The Federal Circuit's statement, at the very end of its opinion, mentioning consideration of any new evidence submitted, conflicted with earlier holdings by the Court in decisions indicating that hypothetical entitlement exists when the "evidence in the veteran's claims file or VA custody prior to the veteran's death" show that the veteran was entitled to a total disability rating for the specified period prior to death. See Green v. Brown, 10 Vet. App. 111, 118 (1997); Cole v. West, 13 Vet. App. 268, 274 (1999). The General Counsel concluded that the Federal Circuit's decision in Hix did not require VA to accept and consider evidence submitted after a veteran's death and offered to establish, under 38 U.S.C. § 1311(a)(2), that the veteran was "entitled to receive" compensation from VA during his lifetime for a service- connected disability that was rated totally disabling for a continuous period of at least eight years immediately preceding his death. Thereafter, in National Organization of Veterans' Advocates, Inc. v. Secretary of Veterans Affairs, 260 F.3d 1365 (Fed. Cir. 2001) (NOVA I), the Federal Circuit concluded that 38 C.F.R. § 3.22 and 38 C.F.R. § 20.1106 stated inconsistent interpretations of virtually identical statutes codified at 38 U.S.C. § 1318(b) and 38 U.S.C. § 1311(a)(2), respectively, and ordered VA to issue regulations to either remove or explain the apparent inconsistency. As noted above, both statutory provisions 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 Federal Circuit concluded that 38 C.F.R. § 3.22 interpreted 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 were found to contain a clear and unmistakable error (CUE). It was also determined that section 20.1106 interpreted 38 U.S.C. § 1311(a)(2), as requiring VA to disregard all decisions during the veteran's lifetime. The Federal Circuit 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 Federal Circuit directive, 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 CUE, 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. 16309, 16317 (Apr. 5, 2002). The revision of 38 C.F.R. § 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 38 U.S.C. § 1311 to award additional DIC benefits where the veteran merely had hypothetical, as opposed to actual, entitlement to compensation. The VA's interpretation was confirmed by 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 it was held that VA should also continue to process claims for survivor benefits that would be rejected because they were based on the filing of new claims after the veteran's death, since the Federal Circuit found that the Department's interpretation of the statute as barring such claims was permissible and reasonable. Thus, it appeared that hypothetical entitlement was no longer viable. However, in Rodriguez v. Nicholson, 19 Vet. App. 275 (2005), the Court determined that the theory of hypothetical entitlement should be applied to claims pending the date of the amendment to 38 C.F.R. § 3.22, i.e., January 21, 2000, but that prior to that time, the amended 38 C.F.R. § 3.22 could not be retroactively applied. That decision was appealed to the Federal Circuit. In Rodriguez v. Peake, 511 F.3d 1147 (Fed. Cir. 2008), the Federal Circuit reversed the decision of the Court, holding that the application of amended section 3.22 to the appellee's claim did not create an unlawful retroactive effect because it did not retrospectively diminish any of her rights to benefits. Thus, the Federal Circuit held that 38 C.F.R. § 3.22, as amended in 2000, did not have an unlawful retroactive effect and may be applied to claims for DIC benefits filed by survivors before the amendment took effect. Because similar amendments were made to the implementing regulations under section 1311(a)(2) in December 2005 as were made in January 2000 to section 3.22, the Board concludes that the Federal Circuit's holding in Rodriquez governs the outcome in this case as well. 38 C.F.R. § 3.10(f)(3); 70 Fed. Reg. 72211, 72220 (December 2, 2005). Accordingly, consideration of hypothetical entitlement may not be considered by the Board. See Rodriguez v. Peake, 511 F.3d 1147 (Fed. Cir. 2008). In this case, based on the determination made during the veteran's lifetime, a rating decision dated in September 1992, (the only one issued prior to his death), non-service- connected pension was granted, effective in December 1991. Service connection was not in effect for any condition during the veteran's lifetime. Thus, at the time of the veteran's death in March 1997, the veteran was not in fact in receipt of a 100 percent rating for service connected disability for eight continuous years prior to his death. At this point, neither the appellant nor her attorney has asserted that the September 1992 rating decision contained clear and unmistakable error (CUE), nor does a review of the evidence support such a finding. Where the law and not the evidence is dispositive in a case, entitlement to the VA benefits sought must be denied due to the absence of legal merit. See Sabonis v. Brown, 6 Vet. App. 426 (1994). Accordingly, as the veteran did not have a service connected disability which was rated totally disabling for at least eight years prior to his death, the Board finds that entitlement to additional monthly DIC pursuant to 38 U.S.C. § 1311(a)(2) is not warranted. 38 U.S.C.A. § 1311(a)(2); 38 C.F.R. § 3.10(f)(3). In this case, the appellant has failed to state a claim for which relief can be granted. Accordingly her appeal must be denied. Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). II. Monetary rates for the retroactive DIC award The appellant was granted DIC benefits under 38 U.S.C.A. § 1311, via a rating decision of September 2002. In a letter dated September 25, 2002, the RO informed the appellant of the monetary amount of her DIC benefit. This letter shows that the appellant's past due award beginning April 1, 1997 was calculated based on the statutory monthly rates payable each year increasing progressively from April 1997 to December 2001 based on yearly legislative increases. The appellant argues through her attorney that she is entitled to DIC compensation based on the statutory monthly rates that were effective as of December 1, 2001. That is, she argues that the rates in effect in December 2001 should be applied to all periods from April 1997 to December 2001. 38 U.S.C.A. § 1303(a) mandates cost-of-living adjustment be made to VA DIC benefits until the year 2011 and these adjustments are tied to increases in Social Security benefits. According to 38 C.F.R. § 3.21, the rates of compensation are published in tabular form in Appendix B of the Veterans Benefits Administration Manual M21-1 and are to be given the same force and effect as if published in the Code of Regulations (CFR) at Title 38. The monetary rates for DIC benefits for a surviving spouse listed in Appendix B of the Veterans Benefits Administration Manual M21-1 are in accordance with 38 U.S.C. § 1331(a)(1). 38 U.S.C.A. § 1311(a)(1) provides that monthly DIC compensation for a surviving spouse shall be at the rate of $833 prior to December 1, 1997; $850 from December 1, 1997 to November 30, 1998; $861 from December 1, 1998 to November 30, 1999; $881 from December 1, 1999 to November 30, 2000; $911 from December 1, 2000 to November 30, 2001; and, $935 effective December 1, 2001. In the present case, the amounts of the appellant's retroactive DIC benefits were designated for each month exactly as mandated by law. At each revision of the statute, the RO determined a revised monthly entitlement amount. For the purpose of this appeal, this same procedure has been in effect from at least April 1997 until the present. That is, each year, Congress mandates the monthly amounts that VA will pay to a surviving spouse, as well as the date the new amount goes into effect. These changes are reflected at 38 U.S.C.A. § 1311. The Secretary has no discretion as to either the amount to be paid, or the date any increase in payments becomes effective. The appellant claims that she is entitled to the dollar rate of DIC benefits in effect on December 1, 2001 for the full period covered by the retroactive award. This argument is devoid of merit and has no basis in statute or established case law. The Board notes that a similar argument was specifically considered and completely rejected by the United States Court of Appeals for the Federal Circuit (Federal Circuit) which held that such an argument "would be tantamount to reading the statute's incorporation of an explicit dollar amount as a waiver of sovereign immunity and as an expression of a willingness to compensate veterans disadvantaged by a [clear and unmistakable error] in real, rather than nominal, dollars." Sandstrom v. Principi, 358 F.3d 1376, 1380 (Fed. Cir. 2004). In Matthews v. Nicholson, 456 F.3d 1377 (Fed. Cir. 2006), the Federal Circuit held that the precedent in Sandstrom applied to retroactive compensation benefits resulting from a grant of an original claim. In Sandstrom, the veteran was awarded past-due benefits based on clear and unmistakable error in a prior rating decision. The veteran's attorney in the Sandstrom case argued that VA had erroneously calculated the rate of the veteran's retroactive benefits during the time period in question (from 1969 to 1996) by applying the monthly rate in effect for 1969, then increasing the monthly amount due by the amount authorized by statute during that time period. He asserted that the amount should have been calculated according to the 1996 rate, so that the 1996 correction would have had the "same effect," pursuant to 38 U.S.C.A. § 5109A and 38 C.F.R. § 3.105(a), as if the decision had been made in 1969. The Federal Circuit rejected these arguments and held that VA's decision to pay in nominal dollars was legally correct. The Board finds that the instant case falls squarely within the Federal Circuit's holdings in Sandstrom and Matthews. The appellant, through her attorney, argues for a benefit that is not permitted by law. The appellant's attorney has cited no authority to support his contentions other than his own interpretation of the statute. There is no legal merit to his argument and the appellant's claim must, consequently, be denied. The Board observes that it is bound by the laws enacted by Congress, VA regulations, the instructions of the VA Secretary, and the precedent opinions of the chief legal officer of VA. 38 U.S.C.A. § 7104(c). In this case, it is evident that the law enacted by Congress provides no basis to award the appellant the increased retroactive benefit she seeks. Here, it is the law and not the evidence which is dispositive of the appellant's claim. See Florintino v. Brown, 7 Vet. App. (1995); Talon v. Brown, 999 F.2d 514 (Fed. Cir. 1993). In this case, it is the law and not the evidence which is dispositive of the appellant's claim. As the veteran's surviving spouse, a higher rate of DIC than that sanctioned under appendix B of Manual M21-1 may not be paid to the appellant for any period. Consequently, the appeal is denied. See Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). ORDER Entitlement to increased or "enhanced" DIC pursuant to 38 U.S.C.A. § 1311(a)(2) is denied. Entitlement to an increase beyond the statutorily set dollar rate of Dependency and Indemnity Compensation (DIC) for the period from April 1, 1997 onward is denied. ____________________________________________ L. M. BARNARD Acting Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs