Steven W. Hamer v. Eric K. Shinseki , 24 Vet. App. 58 ( 2010 )

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO . 07-3181
STEVEN W. HAMER, APPELLANT ,
V.
ERIC K. SHINSEKI,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Decided July 27, 2010)
Kenneth M. Carpenter, Esq., of Topeka, Kansas, for the appellant.
Richard A Daley, Esq., with whom R. Randall Campbell, Esq., Assistant General
Counsel; and David L. Quinn, Esq., Deputy Assistant General Counsel, all of Washington, D.C.,
were on the brief for the appellee.
Before HAGEL, MOORMAN, and LANCE, Judges.
HAGEL, Judge: Steven W. Hamer appeals through counsel a July 9, 2007, Board of
Veterans' Appeals (Board) decision that denied entitlement to VA benefits for total disability based
on individual unemployability (TDIU) for the period of December 1, 1990, through April 7, 2000.
The only disability rating at issue in Mr. Hamer's appeal is for total disability based on individual
unemployability. This appeal is timely, and the Court has jurisdiction to review the Board's decision
pursuant to 38 U.S.C. §§ 7252(a) and 7266(a). Because Mr. Hamer filed a brief through counsel,
the arguments from his pro se informal brief are deemed abandoned. Ford v. Gober, 10 Vet.App.
531, 535 (1997) (holding that if an appellant files an informal brief but subsequently obtains counsel,
any newly filed formal brief supersedes the previously filed informal brief); see Grivois v. Brown,
6 Vet.App. 136, 138 (1994) (holding that issues or claims not argued on appeal are considered
abandoned). Because the Court finds that an award of staged disability ratings based upon a finding
of clear and unmistakable error (CUE) is valid, the Court will affirm the July 9, 2007, Board
Decision.
I. FACTS
Mr. Hamer served in the U.S. Air Force from November 1970 to November 1974. In
November 1978, a VA regional office awarded Mr. Hamer a total disability rating based on
individual unemployability, effective May 1978. In May 1985, the regional office issued another
rating decision terminating Mr. Hamer's benefits for total disability based on individual
unemployability. The regional office based its decision on Mr. Hamer's employment between May
and November 1985. Mr. Hamer did not appeal this decision.
In February 2000, Mr. Hamer filed a motion for revision or amendment of the May 1985
decision terminating his total rating, claiming clear and unmistakable error. Mr. Hamer asserted
there was clear and unmistakable error because; (1) "[his] individual unemployability was terminated
without a neurological work-up," (2) "once a condition has been rated at a level for more than five
years, it cannot be reduced without evidence of sustained improvement," (3) "there is nothing in the
[claims] folder to indicate clear and/or convincing evidence [he] regained employability," and
(4) VA incorrectly interpreted the VA medical examinations. Record (R.) at 173-74.
In April 2000, he filed a claim for an increased rating for total disability based on individual
unemployability. In August 2000, the regional office issued a rating decision granting entitlement
to a total disability rating based on individual unemployability, effective April 2000. However, the
regional office found no clear and unmistakable error in the May 1985 decision.
In March 2004, after further development, the regional office issued a Supplemental
Statement of the Case, granting Mr. Hamer VA benefits for total disability based on individual
unemployability through staged disability ratings. The regional office awarded a 100% disability
rating for the period of January 1, 1990, through November 20, 1990, but denied entitlement to the
same from December 1, 1990, through April 7, 2000. Mr. Hamer appealed and, in February 2005,
the Board sought an opinion from the VA Office of the General Counsel regarding Mr. Hamer's case.
Specifically, the Board sought a response to the following question: "When a TDIU rating is
reinstated by a finding of CUE in the rating decision that reduced the total rating, is it permissible
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when effectuating the CUE determination to discontinue the TDIU rating during a portion of the
retroactive award period based on a finding of actual employment, or may action only be taken to
reduce the TDIU rating prospectively following the issuance of a proposed rating reduction action?"
On July 9, 2007, the Board issued the decision on appeal, denying entitlement to VA benefits
for total disability based on individual unemployability for the period of December 1, 1990, through
April 7, 2000. The Board based its determination on the VA General Counsel opinion, explaining
that the opinion is "binding upon the Board." R. at 11.
On appeal, Mr. Hamer argues that VA was required to fully restore his total disability rating
from 1982, including the time period of December 1990 through April 2000. Mr. Hamer asserts that
the Board erred in its presumption "that a partial reinstatement of a stabilized rating can be
discontinued 'during a portion of the retroactive award period.'" Appellant's Brief (Br.) at 9. Mr.
Hamer asserts that the VA General Counsel opinion and the Board's determinations conflict with the
plain language and clear intent of 38 U.S.C. § 5109A. Further, Mr. Hamer argues that VA cannot
reduce a disability rating because stabilized ratings are afforded "special protections" under
38 C.F.R. § 3.344. Appellant's Br. at 8-10.
In response, the Secretary argues that the Court should affirm the Board decision. The
Secretary asserts that Mr. Hamer has failed to demonstrate that VA's interpretation of its regulations
is inconsistent or unreasonable. The Secretary contends that the interpretation that the procedural
safeguards embodied in 38 C.F.R. § 3.105(e) do not apply to a retroactive corrective action is
appropriate.
II. ANALYSIS
A. Staged Ratings
For the reasons outlined below, the Court finds no reason to differentiate the use of staged
disability ratings based upon a finding of clear and unmistakable error from the assignment of an
initial disability rating, as in O'Connell, or under 38 C.F.R. § 3.343, as in Reizenstein. O'Connell v.
Nicholson, 21 Vet.App. 89 (2007); Reizenstein v. Peake, 22 Vet.App. 202 (2008) aff'd 583 F.3d 1331(Fed. Cir. 2009).
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Here, the Board found clear and unmistakable error in the May 1985 decision. The Board
granted a total disability rating based on individual unemployability for the period of May 7, 1985,
through November 20, 1990. The Board denied entitlement of a total rating from December 1, 1990,
through April 7, 2000. When there is a finding of clear and unmistakable error and reversal or
revision of a previous final Board decision is warranted, then the Board decision finding clear and
unmistakable error "has the same effect as if the decision had been made on the date of the prior
decision." 38 U.S.C. §§ 5109A(b), 7111(b); see 38 U.S.C. § 7111(a); Cook v. Principi, 318 F.3d
1334, 1339 (Fed. Cir. 2002) (en banc); Damrel v. Brown, 6 Vet.App. 242, 245 (1994). Thus, the
July 9, 2007, Board decision has the "same effect" as if it had been made on May 7, 1985.
The effect, described above, that sections 5109A(b) and 7111(b) dictate is that the July 9,
2007, Board decision carries with it the same rights, privileges, and constraints that the initial
disability rating assigned in May 1985 would have. By awarding Mr. Hamer a total disability rating
based on individual unemployability for separate, distinct periods of time, May 1985 to November
1990 and April 2000 to the present, VA awarded Mr. Hamer disability benefits through staged
disability ratings.
This Court has determined that when a claimant is assigned an initial disability rating or
when a higher disability rating is granted during the direct appeal of the decision below, separate
disability ratings may be assigned for separate periods of time in accordance with the facts found.
Such separate disability ratings are known as staged ratings. Fenderson v. West, 12 Vet.App. 119,
126 (1999) (noting that staged ratings are assigned at the time an initial disability rating is assigned);
see Hart v. Mansfield, 21 Vet.App. at 511 (extending entitlement to staged ratings to claims for
increased disability ratings). "Because the claims process before the agency can be lengthy, and
because the level of a veteran's disability may fluctuate over time, staged ratings are a sensible
mechanism for allowing the assignment of the most precise disability rating." O'Connell,
21 Vet.App. at 93.
The July 9, 2007, Board decision awarding staged ratings to Mr. Hamer is essentially an
initial disability rating because of the guidelines specified in sections 5109A(b) and 7111(b). As
highlighted above, this Court has ruled that staged ratings are appropriate for initial disability ratings.
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Consequently, because the July 9, 2007, Board decision has the same effect as an initial disability
rating, staged ratings were appropriate.
B. Protective Rights for Total Disability
Pursuant to 38 U.S.C. § 5112(b)(6), "the effective date of a reduction . . . of compensation"
due to a "change in physical condition shall be the last day of the month following sixty days from
the date of notice to the payee . . . of the reduction." However, 38 U.S.C. § 5112(a) further explains
that "the effective date of reduction or discontinuance of compensation . . . shall be fixed in
accordance with the facts found."
A claimant has the right to a hearing prior to severance of service connection, reduction in
compensation or pension, and other reductions and discontinuances. 38 C.F.R. § 3.105(i) (2010).
Specifically, that section provides for "advance written notice" that the claimant "will have an
opportunity for a predetermination hearing, provided that a request for such a hearing is received by
VA within 30 days from the date of the notice." Id. That section further provides that "[i]f a
predetermination hearing is timely requested, benefit payments shall be continued at the previously
established level pending a final determination concerning the proposed action." Id.However, delving further, this Court has determined that the purpose behind section 3.105(e)
is to enable veterans to "(1) adjust to the diminished expectation and (2) submit evidence to contest
the reduction." O'Connell, 21 Vet.App. at 93. This Court explained further that when "the staged
disability ratings occurred simultaneously and . . . [the veteran] left the VA appeals process with a
higher rating and, therefore, more disability compensation than when he entered it . . . [then] there
is no diminished expectation with which to be concerned and no reduction in benefits for [the
veteran] to contest." Id.; see Reizenstein, supra.Mr. Hamer entered this appeal without an award of total disability based on individual
unemployability. He was assigned staged disability ratings simultaneously and will leave the appeals
process with more disability compensation than when he entered. In other words, at the time his
benefits were restored in 2007, he had been living without VA benefits for over 15 years, and thus
he did not need to "adjust to the diminished expectation," i.e., prior to 2007, he was not reliant upon
benefits to which he was not in receipt of. Accordingly, the protective rights that prohibit VA from
reducing a total disability are not applicable here. See 38 U.S.C. § 5112; O'Connell, 21 Vet.App.
5at 89; 38 C.F.R. § 3.105. The only difference between Mr. Hamer's situation and that which arose
in O'Connell or Reizenstein is that he was awarded staged disability ratings under a finding of clear
and unmistakable error. The Court holds that an award of staged disability ratings based upon a
finding of clear and unmistakable error is valid under the statutes, cases, and regulations outlined
above. See 38 U.S.C. §§ 5109A(b), 7111(b); Reizenstein, 22 Vet.App. at 202; O'Connell, 21
Vet.App. at 89; Fenderson, 12 Vet.App. at 119; 38 C.F.R. §§ 3.343, 3.344.
C. Stabilization of Disability Evaluations
Mr. Hamer also argues that VA cannot reduce a disability rating because of the provisions
of 38 C.F.R. § 3.344. Pursuant to 38 C.F.R. § 3.344, VA "will handle cases affected by change of
medical findings or diagnosis, so as to produce the greatest degree of stability of disability
evaluations . . .[and i]t is essential that the entire record of examinations and the medical-industry
history be reviewed" for "ratings which have continued for long periods at the same level (5 years
or more)."1 Mr. Hamer argues that he was awarded benefits at the 100% rate from May 1985 to
November 1990, and thus fulfills the 5-year time-period "stabilization" requirement of § 3.344, and
that the reduction in benefits after November 1990 violates § 3.344.
This Court has determined that, under 38 C.F.R. § 3.344, "a total disability rating cannot be
reduced on the basis of a single examination unless all the evidence of record establishes that a
claimant's condition has undergone sustained material improvement." Dofflemyer v. Derwinski,
2 Vet.App. 277, 281 (1992). The Court explained that improvement may be material if the veteran
has attained a marked difference in employment. Dofflemyer, 2 Vet.App. at 281; see Collier v.
Derwinski, 2 Vet.App. 247, 250 (1992) ("'[s]pecific consideration of a veteran's employment status
is also required'" (quoting Tucker v. Derwinski, 2 Vet.App. 201, 204 (1992) (Steinberg, J.,
concurring))). As the Board explains, and the record confirms, Mr. Hamer "had been employed from
August 1989 to April 2000 as a National Service Officer for a veteran's service organization. This
employment involved working 40 hours a week and earning as much as $51,000 per year, as reported
by [Mr. Hamer] in April 2000." R. at 8; see R. at 179-80. It is clear that Mr. Hamer's employment
constituted a material improvement in his condition of individual unemployability.
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The relevant language of 38 C.F.R. § 3.344 has not been altered since it was promulgated in 1961. Thus the
Court need not address whether the procedural regulations would apply retroactively or when a decision that predates
the regulation is revised on the basis of clear and unmistakable error. See 26 FR 1586, Feb 24, 1961.
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Pursuant to 38 C.F.R. § 3.343(c)(2):
If a veteran with a total disability rating for compensation purposes based on
individual unemployability begins to engage in a substantially gainful occupation
during the period beginning after January 1, 1985, the veteran's rating may not be
reduced solely on the basis of having secured and followed such substantially gainful
occupation unless the veteran maintains the occupation for a period of 12 consecutive
months.
Mr. Hamer's employment lasted nearly 10 years, well over the 12-month requirement outlined above.
See 38 U.S.C. § 5112(a) ("the effective date of reduction or discontinuance of compensation . . . shall
be fixed in accordance with the facts found").
Nonetheless, this Court has also held that "the procedural protections of [38 C.F.R. § 3.344]
are inapplicable to retroactively assigned staged disability ratings." Singleton v. Shinseki, 23
Vet.App. 376, 380 (2010). As discussed above, this is the very situation applicable to Mr. Hamer's
case, i.e., he was retroactively assigned staged ratings based on the determination that there was clear
and unmistakable error in the 1985 decision. Accordingly, 38 C.F.R. § 3.344 is not applicable in Mr.
Hamer's case. Even if the Court were to find that 38 C.F.R. § 3.344 were applicable to retroactively
applied staged ratings, Mr. Hamer's employment constituted a material improvement in his condition
and therefore the regulation would not apply. See 38 U.S.C. § 5112; Singleton v. Shinseki, 23
Vet.App. 376, 380 (2010); Dofflemyer, 2 Vet.App. at 281; Collier, 2 Vet.App. at 250; 38 C.F.R.
§§ 3.343, 3.344.
III. CONCLUSION
On consideration of the foregoing, the July 9, 2007, Board decision is AFFIRMED.
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