Citation Nr: 18151392 Decision Date: 11/20/18 Archive Date: 11/16/18 DOCKET NO. 10-16 040 DATE: November 20, 2018 ORDER Entitlement to an effective date earlier than August 1, 2009 for apportionment of the Veteran’s benefits to his spouse is denied. FINDINGS OF FACT 1. The Veteran had standing to pursue the appeal as to the effective date of the apportionment of his benefits to his spouse. 2. The Veteran was incarcerated following conviction of a felony from November 1999 to March 2014. 3. In a February 2004 rating decision, the Veteran was granted service connection for a left elbow disability, rated 10 percent disabling, effective June 28, 2002. 4. In March 2004, the Veteran was informed that he would be receiving only one-half of his benefits, but that his dependents may be entitled to withheld benefits; he was asked to provide information regarding his dependents. 5. In a March 2004 VA Form 21-686c, the Veteran identified his wife, B, as his dependent and stated that he wished for her to receive his withheld compensation. 6. In April 2004, the Regional Office (RO) sent a letter to B, at the address provided by the Veteran in March 2004, informing her of her right to file an apportionment claim, and of the information she must provide. 7. The Veteran’s wife, B, did not respond to the April 2004 letter or otherwise indicate an intent to file an apportionment claim until July 9, 2009. 8. An apportionment of the Veteran’s benefits was granted to his wife in September 2009, effective August 1, 2009. 9. The Veteran’s wife first submitted a claim for apportionment of the Veteran’s benefits on July 9, 2009. 10. To the extent that the Veteran’s March 2004 VA Form 21-686c could be construed as an informal claim for apportionment of his VA benefits to his wife, it is considered to have been abandoned by her the failure to respond, within one year, to VA’s request for additional information regarding his wife’s income, expenses, and the value of any property owned by her. CONCLUSION OF LAW The criteria for an effective date earlier than August 1, 2009 for apportionment of the Veteran’s benefits to his spouse have not been met. 38 U.S.C. §§ 5103, 5103A, 5101, 5110, 5313 (West 2014); 38 C.F.R. §§ 3.1, 3.151, 3.155, 3.159, 3.400, 3.665. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from October 1958 to April 1962. His spouse is the beneficiary of an apportionment of disability compensation benefits awarded to the Veteran from the Department of Veterans Affairs (VA). The Veteran’s spouse is not represented. This matter comes to the Board of Veterans’ Appeals (Board) on appeal from a September 2009 decision of the VA RO in St. Louis, Missouri. In November 2016, the Board denied the claim on appeal. The Veteran appealed that decision to the U.S. Court of Appeals for Veterans Claims (Court/CAVC). In a June 2018 Memorandum Decision, the Court vacated the November 2016 Board decision and remanded the matter for a de novo readjudication consistent with the Court decision. Duties to notify and assist Neither the Veteran nor his representative has raised any issues with the duty to notify or duty to assist. See Scott v. McDonald, 789 F.3d 1375, 1381 (Fed. Cir. 2015) (holding that “the Board’s obligation to read filings in a liberal manner does not require the Board... to search the record and address procedural arguments when the veteran fails to raise them before the Board.”); Dickens v. McDonald, 814 F.3d 1359, 1361 (Fed. Cir. 2016) (applying Scott to a duty to assist argument). Moreover, the June 2018 Court decision did not identify any deficiencies with respect to VA’s development of the claim. Entitlement to an earlier effective date for apportionment of the Veteran’s benefits to his spouse The Veteran claims that an earlier effective date than August 1, 2009 for apportionment of his benefits to his spouse is warranted. He asserts that the effective date should be June 28, 2002 (the effective date of the grant of service connection for a left elbow disability). See, e.g., October 2009 notice of disagreement (NOD). In the November 2016 decision, the Board held that the Veteran did not have standing to pursue the appeal as to the effective date of the apportionment of his benefits to his spouse. A determination was made that the Veteran did not have a personal stake in the outcome. The June 2018 Memorandum Decision vacated and remanded the case to the Board based on the Court’s finding that the Board failed to consider whether California State law (wife’s state of residence) conferred standing on the Veteran. The Veteran asserts that he had standing to pursue the appeal as to the effective date of the apportionment of his benefits to his spouse because he has a personal stake in the outcome. Specifically, he contends that the denial of an earlier effective date caused economic injury to him given his spouse’s relocation to California, which is a community property jurisdiction. While he was not entitled to receive the apportionment benefits under 38 C.F.R. § 3.665, he avers he did have a property interest in the marital estate he shared with his wife, which arose of the conversion of their estate to community property under California state law. He advanced that the denial of the earlier effective date for the apportionment of VA benefits to his wife indirectly deprived him of these funds, which would have been considered a part of their community property under California state law. See January 2018 Veteran’s brief to the Court. The Board finds this argument to be persuasive, and concedes that the Veteran had standing to pursue the appeal as to the effective date of the apportionment of his benefits to his spouse. The Board will now turn to the merits of the appeal. For the reasons set forth below, the Board finds that the criteria for an effective date earlier than August 1, 2009 for apportionment of the Veteran’s benefits to his spouse have not been met. Historically, the Veteran was incarcerated due to conviction of a felony for the period from November 1999 to August 2014. In June 2002, he filed a claim for service connection for a left elbow condition. Service connection for residuals of dislocation of the left elbow was granted in a February 2004 rating decision, and a 10 percent rating was assigned, effective June 28, 2002, the date his claim was received. As a result of his incarceration, however, the Veteran was only entitled to receive compensation at one-half of the 10 percent rate beginning the 61st day of incarceration. 38 U.S.C. § 5313(a)(1)(B); 38 C.F.R. § 3.665(a), (d)(2). The March 2004 notice of the decision granting service connection for the left elbow disability informed the Veteran that half of his payment was being withheld, and that, as a result, his dependents may be entitled to the withheld portion. He was informed that before the withheld amount could be paid, he must send information concerning his dependents and their income and expenses. He was also notified that VA would make a decision “based on whatever evidence we have received from your dependent.” In a VA Form 21-686c received March 17, 2004, the Veteran identified his spouse, B, as his sole dependent, and stated that he wanted her to receive the withheld payments. In response, the RO sent a letter to B at the address provided in the March 17, 2004, correspondence. In this letter, dated April 22, 2004, the RO informed B that if she wished to receive any of the Veteran’s benefits, she must submit an apportionment request. She was also notified that she needed to provide information concerning her income, expenses, and the value of any property she owned. No response was received from B. In April 2009, the Veteran wrote to VA that his wife, B, should be receiving an apportionment of his benefits. On July 9, 2009, VA received an apportionment claim from B, and in September 2009, VA granted an apportionment of the Veteran’s VA benefits to his wife, with payment commencing effective August 1, 2009. Notice of this decision was sent to both the Veteran and B. In October 2009, the Veteran filed a notice of disagreement with the effective date of the apportionment. The appeal was denied on the basis that the claim in 2004 was not filed by B, and that she first filed an apportionment claim in July 2009. Authorization to receive a VA monetary benefit requires the existence of both entitlement to the underlying benefit, and a claim for the benefit. See, e.g., Rodriguez v. West, 189 F.3d 1351, 1355 (Fed. Cir. 1999). A claim must be filed in order for any type of benefit to accrue or be paid. 38 U.S.C. § 5101(a); 38 C.F.R. § 3.151; see Jones v. West, 136 F.3d 1296, 1299 (Fed. Cir. 1998). Thus, although B was entitled to receive an apportionment of the Veteran’s compensation, she did not file a claim until several years later, in July 2009. All or part of the compensation not paid to an incarcerated Veteran may be apportioned to the Veteran’s spouse and/or other specified dependents, based on individual need. 38 C.F.R. § 3.665(e). In determining individual need consideration shall be given to such factors as the apportionee claimant’s income and living expenses, the amount of compensation available to be apportioned, the needs and living expenses of other apportionee claimants as well as any special needs, if any, of all apportionee claimants. Id. Apportionment to an incarcerated Veteran’s dependents is not automatic; need must be considered as well, based on information concerning the apportionee claimant’s income, expenses, and net worth. Moreover, such an apportionment is effective the date of reduction of payments made to the incarcerated person (subject to payments to the incarcerated person over the same period) [here, the effective date of service connection, because the Veteran was incarcerated before service connection was granted], if (1) a claim or intent to file a claim as set forth in § 3.155(b) is received within 1 year after notice to the incarcerated person, and any necessary evidence is received within 1 year from the date of request by the VA; otherwise, payments may not be made for any period prior to the date of receipt of a new claim or intent to file a claim as set forth in 38 C.F.R. § 3.155(b). See 38 C.F.R. § 3.665(f). Thus, both an intent to file a claim AND the evidence requested by VA must be received within the specified time limits for the effective date to be based on the initial grant of service connection. Moreover, the claim, or intent to file a claim, must be filed by the “claimant, his or her duly authorized representative, a Member of Congress, or some person acting as next friend of claimant who is not of full age or capacity.” 38 C.F.R. § 3.155(b). There is no indication that B was not of full age or capacity, and the Veteran was not her authorized representative or a Member of Congress. He could not file a claim on her behalf. The Veteran states that his wife, B, said that she never received the April 2004 letter from VA. He asserts that the April 2004 letter was sent to an address over two years after the Veteran had provided it in 2002. He explained that she had relocated several times between 2002 and 2004. There is a presumption of regularity under which it is presumed that government officials “have properly discharged their official duties.” United States v. Chemical Foundation, Inc., 272 U.S. 1, 14-15 (1926); Mindenhall v. Brown, 7 Vet. App. 271, 274 (1994) (VA need only mail notice to the last address of record for the presumption to attach). This presumption of regularity in the administrative process may be rebutted by “clear evidence to the contrary.” Schoolman v. West, 12 Vet. App. 307, 310 (1999); see also Ashley v. Derwinski, 2 Vet. App. 307 (1992) (quoting United States v. Chemical Foundation, 272 U.S. 1, 14-15 (1926)). In this case, the Board finds that the presumption of administrative regularity showing that VA sent the April 2004 letter to B has not been rebutted by clear evidence to the contrary. The Veteran’s recent assertions that B did not receive the April 2004 VA letter do not constitute clear evidence to rebut the presumption that the April 2004 VA letter was sent to B. See, e.g., Santoro v. Principi, 274 F.3d 1366, 1370 (Fed. Cir. 2001); Clarke v. Nicholson, 21 Vet. App. 130, 133 (2007); Jones v. West, 12 Vet. App. 98, 102 (1998). The evidence shows that the address for B was provided by the Veteran in a March 2004 VA Form 21-686c, only one month before the letter was sent from VA to B at that address in April 2004. There is no evidence to corroborate the assertion that B did not receive the April 2004 VA letter. There is no evidence that April 2004 correspondence was returned to sender or in any way marked as undeliverable. “Notice” means written notice sent to a claimant at his/her latest address of record. See 38 C.F.R. § 3.1(q). As noted above, the April 2004 notice letter was sent to B’s latest address of record, which had been provided by the Veteran only one month earlier. Thus, the Board finds that, legally, VA provided adequate notice to B in the April 2004 letter. The Veteran also states that he did not receive any notice from VA that B’s claim had not been received. However, VA is under no obligation to inform the Veteran that his dependent did not file an apportionment claim. VA took the necessary action of informing B that she could request an apportionment of the Veteran’s compensation while he was incarcerated, and she was provided with the forms and instructions concerning what was required of her. It was not until approximately 5 years later that the Veteran apparently became aware that B was not receiving the apportioned benefits. The Veteran has drawn attention to the March 2004 VA letter to him, which he asserts contains very little indication that it was B who must file a claim. The Board does not agree. The March 2004 letter informed the Veteran that in order to for help VA reach a decision, the Veteran’s dependent (B) should furnish her monthly household income and expenses, as well as the value of any property owned by her or any member of her household. The April 2004 VA letter to B specifically informed her of the actions she needed to take, and the information she needed to provide. Moreover, neither the Veteran nor B communicated with VA regarding an apportionment during the intervening 5 years, and neither of them provided any of the requested information, including an application or information regarding B’s income, expenses, and net worth. Further, even if the Veteran’s March 2004 VA Form 21-686c could be construed as an informal claim for apportionment of his VA benefits to his wife, it is considered to have been abandoned by the failure to respond, within one year, to VA’s request for additional information regarding B’s income and expenses. See 38 C.F.R. § 3.158 (providing for denial of the claim as an abandoned claim where the claimant fails to submit relevant information requested by VA); Wood v. Derwinski, 1 Vet. App. 190, 193 (1991) (stating that the duty to assist is not always a one-way street, or a blind alley, and that a veteran must be prepared to cooperate with VA’s efforts to submit evidence supporting the claim). The Board emphasizes an apportionment is not automatic because it requires financial circumstances indicating some degree of need on the part of the apportionee. VA requires the apportionee claimant’s monthly income and expenses as well as the value of any property owned by the claimant and any member of his/her household in order to process an apportionment claim. The income and expense information requested by VA in March 2004 and April 2004 was not received by VA until after B filed her July 2009 apportionment claim, more than 5 years after VA made such request. Therefore, to the extent that the Veteran’s March 2004 VA Form 21-686c could be construed as an informal claim for apportionment of his VA benefits to his spouse, such claim is considered to have been abandoned by the failure to respond, within one year, to VA’s requests for additional information regarding B’s income, expenses, and net worth information. The pertinent legal authority governing effective dates is clear and specific, and the Board is bound by such authority. The evidence shows that B first filed her claim for apportionment of the Veteran’s VA benefits on July 9, 2009, and an effective date of August 1, 2009 for the grant of the apportionment was assigned. On these facts, because the earliest effective date legally possible has been assigned, the appeal for an earlier effective date is without legal merit and must, therefore, be denied. See Sabonis v. Brown, 6 Vet. App. 426 (1994). An effective date earlier than August 1, 2009 for apportionment of the Veteran’s benefits to his spouse is not warranted, and the appeal is denied. MICHAEL A. HERMAN Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD J. Ragheb, Counsel