Citation Nr: 1314038 Decision Date: 04/26/13 Archive Date: 05/03/13 DOCKET NO. 10-02 036 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Detroit, Michigan THE ISSUE Whether the termination of the Veteran's total disability evaluation based on individual unemployability (TDIU) was proper. REPRESENTATION Appellant represented by: Daniel G. Krasnegor, Attorney at Law ATTORNEY FOR THE BOARD B. Diliberto, Counsel INTRODUCTION The Veteran had active service from April 1969 to April 1972. This matter comes before the Board of Veterans' Appeals (BVA or Board) on appeal from a May 1979 rating decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Detroit, Michigan, that terminated the Veteran's TDIU. The Veteran appealed that decision and the case was referred to the Board for appellate review. Unfortunately, the Board failed to adjudicate the issue in its October 1979 determination or in any subsequent determination. Accordingly, that issue is still on appeal. The Board notes that this decision has been split in accordance with BVA Directive 8340, Paragraph 14(c). Accordingly, the portion of the claim wherein the Veteran has alleged clear and unmistakable error in a Board decision dated October 9, 1979 has been addressed in a separate decision. FINDINGS OF FACT 1. The Veteran was granted entitlement to a 100 percent rating for a service-connected psychiatric disorder in April 1973, effective from January 15, 1973. He was assigned a TDIU in November 1977, effective from October 26, 1977. The rating for his service-connected psychiatric disorder was reduced to 70 percent, effective from October 26, 1977. The rating for his service-connected psychiatric disorder was reduced to 50 percent, effective from August 1, 1979. 2. In a May 1979 rating decision, the RO terminated the Veteran's TDIU, effective July 31, 1979. 3. The RO failed to provide proper notice and assistance in the discontinuance of the Veteran's TDIU rating and the action is void ab initio. CONCLUSION OF LAW TDIU is restored, effective July 31, 1979. 38 U.S.C.A. §§ 1155, 5107 (West 2002); 38 C.F.R. §§ 3.105(e), 3.343(a), 3.344, 4.1, 4.2, 4.10, 4.13, 4.16 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION A review of the claims file shows the following: the Regional Office (RO) of the Department of Veterans Affairs (VA) in Detroit, Michigan, granted entitlement to service connection for a "mental condition" characterized as paranoid schizophrenia in April 1973. At that time, a 100 percent disability rating was assigned. In October 1977, the RO reduced the rating for that condition to 70 percent. The RO also granted entitlement to a total disability rating based on individual unemployability (TDIU). In May 1979, the RO reduced the disability rating for the psychiatric disability to 50 percent, with an effective date of August 1, 1979. The RO also discontinued the TDIU, effective July 31, 1979. The Veteran appealed that decision and, in October 1979, the Board issued a determination wherein it characterized the claim on appeal as an "[i]ncreased rating for a psychiatric disability, current evaluated as fifty percent (50%) disabling." The Board notes that it has previously failed to adjudicate the propriety of the termination of the Veteran's TDIU. As noted in the May 2012 Joint Motion, a claimant's NOD must be read liberally. Robinson v. Shinseki, 557 F.3d 1355, 1359-60 (2009). When determining the scope of an NOD, the Board must look at the totality of the communications presented both before and after filing of the NOD. Isenbart v. Brown, 7 Vet. App. 537, 540-41 (1995) (looking at various documents submitted before and after an NOD to find that an NOD encompassed TDIU issue). The change is compensation is what triggers the protections afforded in rating reduction regulations, not the changed rating itself. See Reizenstein v. Peake, 22 Vet. App. 202, 208 (2008). The rating reduction in May 1979 encompassed both the schedular rating for the Veteran's service-connected psychiatric disorder and the termination of the Veteran's TDIU. The Veteran disagreed with the new monetary rate he was to receive and argued that it was impossible for him to live on that compensation in his NOD. Moreover, the Board notes that the RO addressed the issue in its July 1979 Statement of the Case (SOC). Therein, the RO provided pertinent regulations on employability and determined that the Veteran did not warrant a TDIU. The Veteran submitted a Substantive Appeal (VA Form 9) in July 1979 indicating continued disagreement with the change in his monetary award and stating that he had been unable to make an adequate social and industrial adjustment. Unfortunately, the Board has previously failed to adjudicate that issue and it is still on appeal. Total disability ratings for compensation based on individual unemployability may be assigned where the schedular rating is less than total, when it is found that the disabled person is unable to secure or follow a substantially gainful occupation as a result of a single service-connected disability ratable at 60 percent or more, or as a result of two or more disabilities, provided at least one disability is ratable at 40 percent or more and there is sufficient additional service-connected disability to bring the combined rating to 70 percent or more. 38 C.F.R. § 4.16(a). For those veterans who fail to meet the percentage standards set forth in 38 C.F.R. § 4.16(a), total disability ratings for compensation may nevertheless be assigned when it is found that the service-connected disabilities are sufficient to produce unemployability; such cases should be referred to the Director, Compensation and Pension Service, for extra-schedular consideration. 38 C.F.R. § 4.16(b). When the Veteran was granted a TDIU in the November 1977 rating decision, it was granted under 38 C.F.R. § 4.16(a) as the Veteran met the percentage standards set forth therein. Specifically, at that time, his service-connected psychiatric disorder had been assigned a 70 percent rating evaluation. When the Veteran's rating for his psychiatric disorder was reduced from 70 percent to 50 percent, effective from August 1, 1979, TDIU was also discontinued. Standards for termination of a TDIU are found at 38 C.F.R. § 3.343(c). These provisions stipulate that in reducing a rating of 100 percent service-connected disability based on individual unemployability, the provisions of 38 C.F.R. § 3.105(e) are for application but caution must be exercised in such a determination that actual employability is established by clear and convincing evidence. The "clear and convincing" standard requires that capacity for work be proven to a "reasonable certainty" but not necessarily be "undebatable." Vanerson v. West, 12 Vet. App. 254, 258 (1999). The clear and convincing standard of proof is an intermediate standard between preponderance of the evidence and beyond a reasonable doubt. Fagan v. West, 13 Vet. App. 48, 55 (1999); Olson v. Brown, 5 Vet. App. 430, 434 (1993). When in such a case the veteran is undergoing vocational rehabilitation, education or training, the rating will not reduced by reason thereof unless there is received evidence of marked improvement or recovery in physical or mental conditions or of employment progress, income earned, and prospects of economic rehabilitation, which demonstrates affirmatively the veteran's capacity to pursue the vocation or occupation for which the training is intended to qualify him or her, or unless the physical or mental demands of the course are obviously incompatible with total disability. Neither participation in, nor the receipt of remuneration as a result of participation in, a therapeutic or rehabilitation activity under 38 U.S.C.A. § 1718 shall be considered evidence of employability. 38 C.F.R. § 3.343(c)(1). Regulations provide that where the reduction in evaluation of a service-connected disability or employability status is considered warranted and the lower evaluation would result in reduction or discontinuance compensation payments currently being made, a rating proposing the reduction or discontinuance will be prepared setting forth all material facts and reasons. The beneficiary will be notified at his or her latest address of record for the contemplated action and furnished detailed reasons therefore, and will be given 60 days for the presentation of additional evidence to show that compensation payments should be continued at their present level. Unless otherwise provided in paragraph (i) of this section, if additional evidence is not received within that period, final rating action will be taken and the award will be reduced or discontinued effective the last day of the month in which a 60-day period from the date of notice to the beneficiary of the final rating action expires. 38 U.S.C.A. § 5112(b)(6); 38 C.F.R. § 3.105(e). 38 C.F.R. § 3.344 provides for the stabilization of disability evaluations. Part (a) sets out that rating agencies will handle cases affected by change of medical findings or diagnosis, so as to produce the greatest degree of stability of disability evaluations consistent with the laws and VA regulations governing disability compensation and pension. It is noted as essential that the entire record of examinations and the medical-industrial history be reviewed to ascertain whether the recent examination is full and complete, including all special examination indicated as a result of general examination and the entire case history, including hospital reports, bedside examination, examination by designated physicians, and examinations in the absence of, or without taking full advantage of, laboratory facilities and the cooperation of specialists in related lines. Examinations less full and complete than those on which payments were authorized or continued will not be used as a basis of reduction. Ratings on account of diseases subject to temporary or episodic improvement, e.g., manic depressive or other psychotic reaction, epilepsy, psychoneurotic reaction, arteriosclerotic heart disease, bronchial asthma, gastric or duodenal ulcer, many skin diseases, etc., will not be reduced on any one examination, except in those instances where all the evidence of record clearly warrants the conclusion that sustained improvement has been demonstrated. Ratings on account of diseases which become comparatively symptom free (findings absent) after prolonged rest, e.g. residuals of phlebitis, arteriosclerotic heart disease, etc., will not be reduced on examinations reflecting the results of bed rest. Moreover, though material improvement in the physical or mental condition is clearly reflected the rating agency will consider whether the evidence makes it reasonably certain that the improvement will be maintained under the ordinary conditions of life. 38 C.F.R. § 3.344(a). The provisions of 38 C.F.R. § 3.344 apply to ratings which have continued to long periods at the same level (five years or more). They do not apply to disabilities which have not become stabilized and are likely to improve. Re-examinations disclosing improvement, physical or mental in this disabilities will warrant reduction in rating. 38 C.F.R. § 3.344(c). Where a rating is reduced without observance of applicable law and regulations, such rating is void ab initio. See Kitchens v. Brown, 7 Vet. App. 320 (1995); Brown v. Brown, 5 Vet. App. 413 (1993); Dofflemeyer v. Derwinski, 2 Vet. App. 277, 282 (1992). The evidence of record indicates that a VA examination was performed in January 1973. The report from that examination shows that the Veteran had been unemployed since his discharge from service. The examiner stated that the Veteran was psychotic with partial remission. Vocational inadaptability was found to be severe. Another VA examination was performed in December 1974. The report from this examination shows that the Veteran was still unemployed. Vocational inadaptability was still found to be severe. A VA examination report from November 1977 also indicates that the Veteran was still unemployed. The examiner found that the Veteran's paranoid schizophrenia was in fairly good remission and that his vocational impairment was moderate. The examiner also opined that the Veteran could be rehabilitated and that he was advised to seek rehabilitation counseling from the Vocational Rehabilitation for Handicapped People. An additional examination was performed in May 1979. In his report the examiner, a clinical social worker, stated that the Veteran was still unemployed. Social and industrial inadaptability was found to be moderate and the examiner recommended that the Veteran receive a vocational assessment and counseling. A VA examination report from April 1981 indicates the examiner's opinion that the Veteran was unemployable without any vocational rehabilitation. Additional records show that the Veteran was hospitalized for his psychiatric disorder on several occasions and had temporary 100 percent ratings assigned for that condition. By rating decision of May 1979, the RO indicated that a rating reduction was being taken pursuant to VAR 1105(E) (also known as 38 C.F.R. § 3.105(e) (1979). In terminating the Veteran's TDIU rating, the RO properly followed the procedure of 38 C.F.R. § 3.105(e) concerning notice to the Veteran of the reduction and opportunity for the submission of evidence showing that the action should not be taken. However, the RO does not appear to have considered the provisions of 38 C.F.R. § 3.343 pertaining to the continuance of total disability ratings. Under 38 C.F.R. § 3.343(c), when determining whether a TDIU rating is to be termination, caution must be exercised that actual employability is established by clear and convincing evidence. At the time of the rating reduction, there was no affirmative evidence showing that the Veteran was employed or that he could perform substantially gainful employment. The evidence did not show that actual employability was established by clear and convincing evidence consistent with the protections of 38 C.F.R. § 3.343. Nor is there evidence in the subsequent record showing the Veteran to have regained his employability. In fact, a review of the claims file shows that the Veteran had frequent exacerbations of his psychiatric disorder resulting in hospitalization. In addition, the provisions of 38 C.F.R. § 3.344(a) and (b) are applicable because the Veteran's 100 percent rating was in effect for more than five years at the reduction. Although the Veteran's TDIU rating was only in effect from October 26, 1977 to July 31, 1979, the Board observes that the 100 percent rating for the Veteran's service-connected psychiatric disorder was in effect from January 15, 1973. The Court has stated that in rating reduction cases, it is the change in compensation that triggers the protections afforded in rating reduction cases, not the changed rating itself. See Reizenstein v. Peake, 22 Vet. App. 202, 208 (2008) (confirmed that the class of veterans that Congress sought to protect by offering procedural protections when compensation is reduced included those who had come to rely on such compensation). The RO itself observed that the grant of a TDIU in November 1977 meant that there would be no reduction in the Veteran's compensation payments. At the time of the rating reduction the evidence did not support a finding of "sustained material improvement under the ordinary conditions of life," as required under 38 C.F.R. § 3.344(a) for a rating reduction and, correspondingly, for TDIU termination. Accordingly, the Board concludes that restoration of a TDIU rating is warranted, effective July 31, 1979. Duty to Assist On November 9, 2000, the Veterans Claims Assistance Act of 2000 (VCAA) was enacted. The VCAA has since been codified at 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5106, 5107 and 5126. These changes apply to all claims filed on or after the date of enactment of the VCAA, or filed before the date of enactment and not yet final as of that date. However, as the decision as to the propriety of the termination of the Veteran's TDIU is fully favorable, the Board finds that no further assistance in developing the facts pertinent to that matter is required. ORDER As the termination of the Veteran's TDIU effective July 31, 1979, was improper, restoration of TDIU from that date is granted. ____________________________________________ F. JUDGE FLOWERS Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs