Citation Nr: 23040366 Decision Date: 07/24/23 Archive Date: 07/24/23 DOCKET NO. 20-20 978 DATE: July 24, 2023 ORDER An effective date of December 31, 2008, for the award of apportionment of the Veteran's VA disability compensation benefits in favor of his then-spouse, A.F., is granted. FINDINGS OF FACT 1. The appellant submitted a December 31, 2008, informal claim for apportionment of the Veteran's VA disability compensation benefits. 2. The appellant was not notified of a decision by the AOJ that the claim was being discontinued. 3. The Veteran has standing to disagree with the effective date assigned in the May 2014 administrative decision awarding apportionment. CONCLUSION OF LAW The criteria for an effective date of December 31, 2008, of the award of apportionment of the Veteran's VA disability compensation benefits in favor of his then-spouse A.F. have been met. 38 U.S.C. §§ 5110, 5307; 38 C.F.R. §§ 3.400, 3.450, 3.451, 3.452. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty in the U.S. Marine Corps from February 1965 to February 1969. At all relevant times, the Veteran was incarcerated. The appellant was the Veteran's spouse from December [REDACTED], 2008, to February [REDACTED], 2016, and February [REDACTED], 2020, to June [REDACTED], 2021. See Marriage Certificates, Divorce Decrees. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a May 2014 administrative decision of a Department of Veterans Affairs (VA) Regional Office (RO). The decision awarded the apportionment of the Veteran's VA disability compensation to the appellant. In August 2020 and November 2022, the Board remanded this matter for further evidentiary development. The requested development was completed, and the case has now been returned to the Board for further appellate action. A claim for an apportionment is a "contested claim" and is subject to special procedural regulations.38 C.F.R. §§ 19.100, 19.101, 19.102; see also 38 C.F.R. §§ 20.500-20.504; 20.713. The Board remands directed the Agency of Original Jurisdiction (AOJ) to comply with the procedural regulations. Notice of the May 2014 decision was sent to the appellant and the Veteran in May 2014. The Veteran disagreed with the May 2014 decision in July 2014. After the November 2022 Board remand, the AOJ sent a copy of the Statement of the Case (SOC) and Form 9 substantive appeal to the appellant. See 38 C.F.R. §§ 19.100, 19.101, 19.102; see also38 C.F.R. §§ 20.500-20.504; 20.713. Unfortunately, the address used was the Veteran's correctional facility address. Nonetheless, because this decision is in favor of the appellant, the Board finds the error is harmless. The Veteran submitted the original Form 9 substantive appeal. He demonstrated through his multiple correspondences with VA of his awareness of the status of the appeal in general. 1. The effective date of the award of apportionment of the Veteran's VA disability compensation benefits in favor of his then-spouse A.F. The Veteran and appellant seek an effective date earlier than November 23, 2011, for the apportionment of the Veteran's VA disability compensation benefits. A Veteran's benefits may be apportioned if the Veteran is not residing with his spouse or children, and a claim for apportionment is filed for or on behalf of the spouse or children. 38 C.F.R. § 3.452 (a). When a veteran is not residing with his or her spouse, all or any part of the compensation benefits payable may be apportioned as may be prescribed by the Secretary of VA. 38 U.S.C. § 5307 (c). As applicable to this case, any person incarcerated in a Federal, State, or local penal institution in excess of 60 days for conviction of a felony will not receive compensation in excess of specified amounts. See 38 C.F.R. § 3.665 (a). If a veteran's combined disability rating is 20 percent or more, then the veteran will receive compensation payable under 38 U.S.C. § 1114 (a), or the equivalent of a 10 percent rating. See 38 C.F.R. § 3.665 (d)(1). If a veteran's combined disability rating is less than 20 percent, then the veteran will receive one-half the rate of compensation payable under 38 U.S.C. § 1114 (a). See 38 C.F.R. § 3.665 (d)(2). All or part of the compensation not paid to an incarcerated veteran may be apportioned to the veteran's spouse, child or children, and dependent parents on the basis of individual need. 38 C.F.R. § 3.665 (e). In determining individual need, consideration is 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. 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, 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 (2) 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). Additionally, 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). The "benefit-of-the-doubt rule" rule does not apply in apportionment cases because it is impossible to give the benefit of the doubt to a veteran and a claimant simultaneously. Elias v. Brown, 10 Vet. App. 259 (1997). a. Standing Incarcerated veterans typically do not have standing to appeal decisions regarding apportionments of the VA disability compensation benefits withheld during their incarceration because they no longer have a personal stake in those benefits once reduction of benefits has been authorized. See Ferenc v. Nicholson, 20 Vet. App. 58, 64 (2006). However, the United States Court of Appeals for Veterans Claims (CAVC) has held that incarcerated veterans maintain standing to appeal decision regarding apportionments under certain conditions. Fuller v. McDonough, 35 Vet. App. 142 (2022). Where a veteran was incarcerated in excess of 60 days following a felony conviction and apportionment benefits were awarded to their spouse, the Veteran may have standing to pursue an appeal concerning that award if: 1) the marriage is subject to the laws of a community property jurisdiction, 2) the marriage is intact, 3) there is no evidence of a planned martial dissolution, 4) the claim relates to an economic injury to the martial community property, and 5) the interests of the Veteran and the spouse concerning the outcome of the appeal are aligned. Id. The Board finds that the Veteran has standing in this case. Although Michigan has not been a community property state since the repeal of the Community Property Act in 1982, the Veteran's and appellant's February 2016 divorce decree addresses the splitting of the proceeds of the Veteran's "litigation" of benefits claims. The decree directs that the benefits are marital in nature and that, if the Veteran is successful, the parties shall equally divide the proceeds derived from the suit. The divorce decree then stated that Veterans Affairs is ordered to make the proceeds payable to Plaintiff's attorney in that lawsuit. While the state court has no authority over a federal agency such as VA, this shows that the Veteran has an interest in the apportionment, and thus, satisfies prongs 1, 4, and 5 of the criteria for standing. Additionally, with regard to aligned interests, the claims file is filled with requests by the Veteran that VA grant these benefits to the appellant, with the exception of one letter. Thus, interests are certainly aligned. With respect to the other prongs, the marriage was intact at that time, and there was no evidence at that time of a planned martial dissolution. Accordingly, the Board finds the Veteran had standing to disagree with the effective date of the award. 2. Earlier Effective Date 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), 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 (2) 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). In this case, the Veteran was incarcerated since June 1988. His marriage to A.F. did not take place until December 2008. Therefore, it is obvious that the effective date cannot be the date of reduction of payments for incarceration. The other effective date provisions are the crux of this appeal. The Veteran and the appellant assert that the effective date should be December 2008. The Veteran asserts that in the December 31, 2008, Status of Dependents Form, he filed for apportionment. See July 2014 NOD. He points to his statement in that form that he wished to have all his benefits allotted to the appellant. See June 2023 Informal Hearing Presentation. The Veteran asserts that the December 2008 form was an informal claim for benefits. See April 2020 VA Form 9 Substantive Appeal. The record shows that a December 2008 VA Form 21-686c Declaration of Status of Dependents was submitted. The name of the claimant was the appellant's, and the appellant signed the form. This form showed notice of the appellant's and the Veteran's marriage on December [REDACTED], 2008. Importantly, in the remarks, there was the following statement: "I, the Veteran, [Veteran's name], allot all of my VA benefits to my wife [the appellant's name], including my disability benefit." The address given was not a correctional institution, therefore, the Board concludes it was the appellant's address. In May 2009, the AOJ responded to the Veteran at his correctional facility address that it could not accept the December 2008 dependency claim form because it was not signed by him. Therefore, the AOJ was unable to proceed further, the letter stated. The AOJ provided instructions on how to proceed, and it notified the Veteran of the special apportionment benefits available for his spouse while he was incarcerated. The Veteran then submitted a May 2009 VA Form 21-686c Declaration of Status of Dependents that was signed by him. This one did not have the statement regarding allocation of benefits. Similarly, a July 2010 form also did not have the statement regarding allocation of benefits. It was not until November 23, 2011, that VA received another statement by the Veteran asking for allotment of benefits to his wife. The Board finds that an informal claim for benefits was submitted by the appellant on December 31, 2008. The AOJ erroneously restricted such a claim to the Veteran. However, the appellant is possibly the more appropriate party to have claimed apportionment. The May 2009 letter from the AOJ regarding not proceeding with the claim was not addressed to the appellant and there is no evidence the appellant was notified of the AOJ decision to discontinue the claim. Therefore, she did not have proper notice. Accordingly, the claim remained pending until the next decision regarding apportionment. The next decision regarding apportionment was the May 2014 decision awarding apportionment effective November 8, 2012 (which was subsequently changed by the AOJ to the current November 23, 2011, date). Accordingly, the claim was pending continuously since December 31, 2008. Therefore, the effective date of the apportionment should be December 31, 2008. D. Martz Ames Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Rocktashel, Counsel The Board's decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.