Citation Nr: 1601060 Decision Date: 01/12/16 Archive Date: 01/21/16 DOCKET NO. 09-02 243 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Montgomery, Alabama THE ISSUES 1. Whether the creation of an overpayment of $39,029 in disability compensation benefits beginning February 13, 2004 was proper, to include whether the debt was validly created. 2. Whether the reduction of the Veteran's disability compensation benefits beginning May 4, 2005 based on his felony incarceration was proper. 3. Whether the creation of an overpayment of $7,337.67 in disability compensation benefits beginning December 1, 2011 was proper, to include whether the debt was validly created. (The issues of entitlement to an earlier effective date for the grant of apportionment benefits for the Veteran's daughter and entitlement to an apportionment for the Veteran's mother are addressed in separate decisions.) REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD Evan M. Deichert, Counsel INTRODUCTION The Veteran served on active duty from February 1976 to February 1977. This matter is before the Board of Veterans' Appeals (Board) on appeal of decisions of July 2005, July 2007, and February 2015 of the Montgomery, Alabama, Regional Office (RO) of the Department of Veterans Affairs (VA). The July 2005 decision reduced the Veteran's benefits based on his fugitive felon status. The July 2007 rating decision reinstated some (but not all) of the Veteran's previously reduced benefits, and it also reduced the Veteran's benefits effective May 4, 2005, based on his felony incarceration. The February 2015 rating decision again reduced the Veteran's compensation based on his incarceration. The particulars of these decisions are explained in greater detail below. During the pendency of the appeal, the issues of entitlement to waivers of overpayments created as a result of the Veteran's fugitive felon status and his felony incarceration have been raised by the record in various letters from the Veteran to VA. The issues on appeal have been limited to the propriety of the various reductions at issue here, as the waiver issues have not been adjudicated by the agency of original jurisdiction (AOJ). Thus, the issues of entitlement to waivers of overpayments created by the Veteran's reduction in compensation benefits based on his fugitive felon status and felony incarceration have been raised by the record but have not been adjudicated by the AOJ. Therefore, the Board does not have jurisdiction over them, and they are referred to the AOJ for appropriate action. 38 C.F.R. § 19.9(b) (2015). The decision below addresses the issue of whether the reduction of the Veteran's disability compensation benefits beginning May 4, 2005 based on his felony incarceration was proper. The issues of the propriety of overpayments from February 13, 2004 and December 1, 2011 are addressed in the REMAND portion of the decision below and are REMANDED to the AOJ. FINDINGS OF FACT 1. As of January 2003, the Veteran was in receipt of a total disability rating based on individual unemployability (TDIU) effective December 1991. 2. The Veteran was convicted of four felonies resulting in prison terms longer than 60 days on March 4, 2005. 3. In July, 2007, the RO issued a decision reducing the Veteran's disability benefits to the 10 percent rate effective May 4, 2005, the 61st day of his incarceration, after proposing such a reduction. CONCLUSION OF LAW The reduction of the Veteran's disability compensation benefits due to incarceration for a felony conviction was proper. 38 U.S.C.A. § 5313 (West 2014); 38 C.F.R. § 3.665 (2015). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Duties to Notify and to Assist Generally, VA has a duty to provide notice of the information and evidence necessary to substantiate a claim and provide assistance in substantiating a claim. 38 U.S.C.A. §§ 5103(a), 5103A (West 2014); 38 C.F.R. § 3.159(b) (2015). Here, however, the pertinent law is determinative of the Veteran's claim. See Smith v. Gober, 14 Vet. App. 227, 231-32 (2000). The facts of the case, specifically the dates associated with the Veteran's incarceration, have not been disputed by the Veteran. Thus, because the law as mandated by statute (and not the evidence or facts of record) is dispositive of this appeal, the notice and assistance provisions are not for application. Mason v. Principi, 16 Vet. App. 129 (2002); see also Sabonis v. Brown, 6 Vet. App. 426, 429-30 (1994) (where application of the law to the facts is dispositive, the appeal must be terminated because there is no entitlement under the law to the benefit sought). Moreover, this is not a claim for benefits, but rather a request for an action of stopping benefit payments to be reversed. These types of action have their own provisions, which are detailed below. As such, no further action is required regarding VA's duty to notify or assist. II. Propriety of the Reduction for Felony Incarceration Legal and Factual Background Under VA laws and regulations, a person who is incarcerated in a Federal, State or Local penal institution in excess of 60 days for conviction of a felony will not be paid compensation in excess of that amount specified in 38 C.F.R. § 3.665 beginning on the 61st day of incarceration. 38 U.S.C.A. § 5313(a)(1); 38 C.F.R. § 3.665(a). For purposes of this section, a felony is any offense punishable by death or imprisonment for a term exceeding 1 year, unless specifically categorized as a misdemeanor under the law of the prosecuting jurisdiction. 38 C.F.R. § 3.665(b). In the case of a veteran with a service-connected disability rated at 20 percent or more, the veteran shall not be paid an amount that exceeds the rate under 38 U.S.C.A. § 1114(a), which is at the rate of 10 percent. 38 C.F.R. § 3.665(d). A review of the history of the Veteran's claims and appeals is instructive. In January 2003, the Board granted a claim for a TDIU effective December 1991. The RO effectuated this grant in a January 2003 rating decision. In November 2004, the RO learned that the Veteran was the subject of an outstanding warrant in Alabama. In July 2005, the RO discontinued the Veteran's benefits effective February 13, 2004, on the basis that he was considered a "fugitive felon" in light of the outstanding warrant. It also informed him that same month that, as a result of the reduction, an overpayment has been created. In a January 2006 letter, the Veteran explained that, during the period for which he was considered a fugitive felon, he was actually in jail. In subsequent letters, the Veteran asked to have his benefits reinstated, questioned the validity of his debt, and (without explicitly saying so) requested a waiver of the debt he was found to owe to VA. In July 2007, the RO contacted the Warrants and Convictions Clerk of Covington County, Alabama. The Clerk informed VA that the Veteran's 2004 warrant from Alabama was cleared by his arrest in that state on June 11, 2004. The Clerk noted that the Veteran was in jail awaiting trial from June 11, 2004 until he posted bond on November 22, 2004. The Veteran was sentenced on March 4, 2005 and transferred from jail to Alabama state prison on September 12, 2005. Though not included with the information from the Clerk, records from the Court of Criminal Appeals of Alabama indicate that the Veteran was convicted of four felonies-for which he was sentenced to life imprisonment, 10 years imprisonment, 20 years imprisonment, and 1 year imprisonment, respectively. In response to all of this information, the RO issued a decision in July 2007. That decision reinstated the Veteran's benefits beginning June 11, 2004. Pursuant to 38 C.F.R. § 3.655, the RO also adjusted the Veteran's evaluation to 10 percent effective May 4, 2005, 60 days after the date of his felony conviction. In February 2008, the Veteran filed a notice of disagreement (NOD) with the July 2007 decision. The Veteran stated that he disagreed with the overpayment created by his incarceration, stating that his mother had informed VA that he was in jail. The Veteran included a September 2007 letter from his mother, in which she stated that she informed VA of the Veteran's incarceration in October 2003. The RO issued a statement of the case in January 2009, and the Veteran filed his substantive appeal that same month. In February 2014, the RO informed the Veteran that it had (for reasons unknown) been paying him compensation at a rate higher than the 10 percent rate beginning December 1, 2011. Because the Veteran remained incarcerated, the RO proposed decreasing the Veteran's disability compensation to the 10 percent rate. The RO issued a decision effectuating this decrease in February 2015. The Veteran filed a NOD with this decision in March 2015. Analysis To begin, the issue certified to the Board has been styled as the validity of the debt created by the July 2007 determination that reduced the Veteran's compensation to the 10 percent rate effective May 4, 2005, on account of his felony conviction and incarceration. As explained above, however, because of the earlier, July 2005 rating decision, the Veteran was only in receipt of a 10 percent rating at the time of his conviction and incarceration, as the RO had previously reduced his rating on account of his fugitive felon status. Thus, the July 2007 rating decision could not have created a new debt, as the Veteran was previously only granted a 10 percent rate because of his fugitive felon status. The Board has therefore recharacterized the issue as whether the reduction of his benefits beginning May 4, 2005 because of his felony conviction was proper. On that point, the evidence is clear that the RO's actions were proper. Again, when a claimant is incarcerated for longer than 60 days on account of a felony conviction, that claimant's disability rating (if greater than 20 percent) must be reduced to 10 percent effective the 61st day after his conviction. 38 U.S.C.A. § 5313(a)(1); 38 C.F.R. § 3.665(a). Here, in its July 2007 decision, the RO determined that the Veteran was convicted of a felony on March 4, 2005, and it reduced his benefits effective May 4, 2005, the 61st day after his conviction. This was proper notice of the reduction and he was told that that the 10 percent rate would continue until any release from incarceration. Courts have upheld this type of reduction of benefits under 38 C.F.R. § 3.665. See, e.g., Mulder v. McDonald, 805 F.3d 1342 (Fed. Cir. 2015); Mulder v. Gibson, 27 Vet. App. 10 (2014); Shephard v. Shinseki, 26 Vet. App. 159 (2013); Ferenc v. Nicholson, 20 Vet. App. 58 (2006). In his numerous letters and statements to VA, the Veteran has not argued any of the above summarized facts regarding his March 2005 conviction and sentencing. His letters have primarily addressed either the propriety of the July 2005 and February 2015 reductions or the issues of apportionments for his daughter and mother (all of these issues are addressed either in the remand section below or in separate decisions). In short, the evidence is clear that the Veteran was convicted of a felony and sentenced to a period of incarceration greater than 60 days on March 4, 2005. The reduction of his benefits to a 10 percent rate effective May 4, 2005 was proper. The preponderance of the evidence is against the Veteran's claim; because this is a legal determination, there is no doubt to be resolved. The appeal of this issue must be denied. ORDER The reduction of the Veteran's disability compensation benefits beginning May 4, 2005 based on his felony incarceration was proper, and the appeal is denied. REMAND The remaining claims on appeal must be remanded. As mentioned above, the RO first reduced the Veteran's disability compensation in a July 2005 rating decision on the basis that he was a fugitive felon. The RO concluded that the Veteran had been overpaid some $39,029 as a result. Following that decision, the Veteran sent numerous letters to the RO arguing that his compensation should not have been reduced. Though the Veteran never used the term "disagreement" in these letters, his desire to appeal (or at least otherwise get a response or explanation) this decision is clear. Letters from the Veteran and his representative also contest the validity of the debt created by the overpayment. Thus, the Board will treat a January 2006 letter from the Veteran as a NOD with the July 2005 decision. More recently, VA had been paying the Veteran at a rate above the 10 percent rate mandated for incarcerated claimants since December 1, 2011. When the RO discovered this, it proposed decreasing the Veteran's rating in a February 2014 rating decision, and then effectuated this reduction in a subsequent February 2015 rating decision. The RO also concluded that the Veteran had been overpaid by $7,337.67 as a result. Unlike in the first instance, the Veteran did explicitly file a NOD with the February 2015 reduction. His March 2015 letter headlined "Notice of Disagreement" specifically stated that he was appealing the February 2015 rating decision that reduced his benefits. Further communication from the Veteran showed that he contested the validity of the debt. When there has been an adjudication by the RO and a timely NOD has been filed, a statement of the case (SOC) addressing the issue must be furnished to the appellant. Manlincon v. West, 12 Vet. App. 238 (1999). As no SOC has been issued for either of the NODs highlighted above, these issues must be remanded. Accordingly, these issues are REMANDED for the following action: Provide a SOC to the Veteran regarding issues 1 and 3 above. Return these issues to the Board only if the Veteran perfects a timely appeal of the issues. The appellant has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This case must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West 2014). ______________________________________________ RYAN T. KESSEL Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs