Jerry G. Dalton v. R. James Nicholson

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO . 04-1196
JERRY G. DALTON , APPELLANT ,
V.
R. JAMES NICHOLSON ,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Argued September 14, 2006 Decided February 16, 2007 )
Kenneth M. Carpenter, of Topeka, Kansas, for the appellant.
Pamela M. Nash, with whom Tim S. McClain, General Counsel; R. Randall Campbell,
Assistant General Counsel; and Richard Mayerick, Deputy Assistant General Counsel, were on the
brief, all of Washington, D.C., for the appellee.
Before MOORMAN, LANCE, and SCHOELEN, Judges.
LANCE, Judge: The appellant, Jerry G. Dalton, appeals through counsel a May 12, 2004,
decision of the Board of Veterans' Appeals (Board) that denied service connection for residuals of
a back injury, and denied entitlement to an effective date earlier than June 20, 2000, for the
assignment of a 70% disability rating for post-traumatic stress disorder (PTSD) with major
depression and a total disability rating based on individual unemployability (TDIU). Record (R.)
at 1-21. The Court has jurisdiction to review the Board decision pursuant to 38 U.S.C. §§ 7252(a)
and 7266(a). For the reasons that follow, the Court will affirm in part, and vacate in part, the May
2004 Board decision, and remand two matters for readjudication consistent with this opinion.
I. FACTS
The appellant served on active duty in the U.S. Army from October 1966 to September 1968,
including service in Vietnam. R. at 25, 58. An April 15, 1967, service medical record (SMR)
reflects that he was involved in an automobile accident and complained of pain in his left side. R.
at 37. X-rays of the ribs were negative for fractures. R. at 36. The diagnostic impression was "left
flank contusion." R. at 37. At separation, the appellant denied ever having had any back problems.
R. at 42.
In June 1995, a VA regional office (RO) awarded service connection for PTSD and assigned
a 50% disability rating. R. at 58-60. Thereafter, in June 1996, March 1997, and February 1998, the
appellant filed claims for an increased disability rating for PTSD. R. at 85, 103, 116. In June 1998,
the appellant, through counsel, disagreed with the denial of his claims and initiated an appeal. R.
at 129-41, 157-60. In April 1999, the Board issued a decision denying an increased disability rating
for PTSD. R. at 177-83. That decision was not appealed and it became final.
On June 20, 2000, the RO received a statement in support of claim in which the appellant
stated: "Amend original claim to add back injury. I hurt my back in Chu Lai, Vietnam in 1968. A
progress note is in my SMR showing I went on sick call. I am filing for [service connection] under
the combat advantage rule. Amend to add any secondary conditions to original back injury." R. at
205. He also stated that "this is an informal claim for I.U. [TDIU] benefits. I am unable to work
because of my PTSD and back condition." Id.On July 21, 2000, VA provided the appellant with a psychiatric compensation and pension
examination. R. at 263-66. The examiner recorded the appellant's employment history, which
included his assertion that he had had his own auto repair shop until 1994 when he reportedly closed
it because of his back condition. R. at 264. The examiner reported that the appellant "was not
involved in combat but he was stationed in a combat zone. Their area was at times under mortar and
rocket attack and he often was in fear for his life. He did not see anyone actually killed." R. at 263.
The appellant gave a history of recurrent dreams of women and children rummaging through garbage
and eating discarded food. He also reported reexperiencing, through dreams, an incident that
occurred when an ammunition dump exploded and the impact knocked him into a wall. Id. The
examiner noted that "he was in Vietnam and, although he was not in direct combat situations, he was
in dangerous situations and fearful for his life." R. at 266. The examiner diagnosed PTSD, chronic;
major depression, recurrent, non-psychotic, severe. Id. The examiner also opined that "[a]t this
point, he does not seem capable of maintaining employment." Id.2
On November 1, 2000, the appellant, through the same counsel representing him here on
appeal, sent a letter to the RO stating that he had filed a claim for TDIU three months earlier and
that pursuant to the VA examiner's conclusions a TDIU rating should be awarded. R. at 280. A VA
Form 21-8940, entitled "Veterans Application for Increased Compensation Based on
Unemployability," was also received by the RO on November 17, 2000. R. at 282-83.
On January 24, 2001, the RO increased the appellant's PTSD disability rating to 70%,
awarded TDIU, and assigned a June 20, 2000, effective date to both awards. R. at 285-93. With
regard to the TDIU award, the RO noted: "Evidence received shows the veteran has been unable to
work since 1994, due to his service connected [PTSD]. . . . The veteran is entitled to receive
individual unemployability benefits effective June 20, 2000." R. at 291. Thereafter, in September
2001, the RO denied service connection for a back injury because there was no evidence that the
appellant's back condition was related to service. R. at 441-46.
On January 24, 2002, the appellant filed a Notice of Disagreement (NOD) with the
September 2001 RO decision that denied his back claim. R. at 448-53. On the same date, he also
filed an NOD with the January 24, 2001, RO decision that assigned the June 20, 2000, effective date
for his 70% disability rating for PTSD and TDIU. R. at 457-63. He argued, inter alia, that
pursuant to the [Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. No. 106-
475, 114 Stat. 2096], retrospective medical opinions should have been obtained to
determine whether or not it is factually ascertainable that the veteran's condition
increased in severity during the time period of January 1995 to June 2000 and
warranted a disability rating in excess of 50% for PTSD [with depression] and to
determine whether or not the claimant was unable to perform substantial gainful
employment for the time period of January 5, 1995, to June 20, 2000.
R. at 461.
In April 2003, VA provided the appellant with a compensation and pension examination of
his back. R. at 496-99. He reported to the examiner that he had hurt his back in Vietnam when an
ammunition dump exploded. R. at 496. The examiner performed a physical examination, and
reviewed current medical records and the claims file. Id. The examiner concluded: "After full
review of [the claims] file and [SMRs], I see no evidence of any back injury while in service and it
is my medical opinion that it is not likely that the veteran's present back problems are related to his
military service." R. at 498.
3
In June 2003, the Board remanded the appellant's claims to the RO for additional
development. R. at 507-13. In July and September 2003, the RO sent him letters informing him of
the status of his claim for service connection for a back disability and entitlement to an earlier
effective date for his 70% disability rating for PTSD and TDIU. R. at 507-12, 525-31. An August
2003 Supplemental Statement of the Case (SSOC) continued to deny an effective date earlier than
June 20, 2000, for his 70% disability rating for PTSD and TDIU. R. at 515-23. In his Substantive
Appeal, the appellant, through counsel, argued, inter alia, that the January 2001 RO decision was
issued prematurely because he had not received notice in compliance with the VCAA prior to the
adjudication. R. at 533-39. In particular, he argued that, had the Secretary complied with the notice
requirements, he would have had up to one year to submit the evidence necessary to substantiate his
claim–evidence that he had been unable to work from June 1997 to June 2000 as a result of his
service-connected PTSD. R. at 535.
On May 12, 2004, the Board issued the decision here on appeal. R. at 1-21. In that decision,
the Board found that (1) the appellant's back condition was not related to service, (2) entitlement to
an increased rating for PTSD was first demonstrated subsequent to June 20, 2000, and (3) a formal
claim for TDIU was first filed on June 20, 2000. R. at 4.
On appeal, the appellant raises three arguments.1 First, with respect to his appeal of the
effective date assigned to his 70% disability rating for PTSD and TDIU, he asserts that VA did not
provide him with adequate notice pursuant to 38 U.S.C. § 5103(a). Appellant's Brief (Br.) at 7-12.
The essence of his argument is that VA did not inform him of the missing evidence that would
otherwise entitle him to an earlier effective date. Br. at 7.
Second, he contends that the Board erred when it failed to consider and apply applicable
provisions of law and regulation. Br. at 12-15. Although the appellant's briefing on this matter is
not a model of clarity, it appears, from his reply brief, that he is only contesting the effective date
assigned to his award of TDIU. Reply Br. at 8 n.2 ("Mr. Dalton did not make a claim that the
effective date 'for PTSD' was wrongly decided by VA. . . . Only the effective date for the award of
TDIU is at issue."). His argument here is twofold. First, he asserts that the Board erred when it
1
The appellant raised a fourth argument in his opening brief; however, that argument was
subsequently withdrawn in his reply brief. Br. at 15-18, Reply Br. at 1.
4
concluded, as a matter of law, that he was not entitled to an effective date earlier than June 20, 2000,
for his award of TDIU. Br. at 12-13. The main thrust of this argument is that a claim for TDIU is
an application for increased compensation and the Board should have considered 38 U.S.C.
§ 5110(b)(2) and 38 C.F.R. § 3.400(o)(2) (2006). Id. Second, he asserts that, when considering his
eligibility for TDIU, the Board should have considered the holdings in Roberson v. Principi,
251 F.3d 1378 (Fed. Cir. 2001); Bowling v. Principi, 15 Vet.App. 1 (2001); and 38 C.F.R.
§§ 3.340(a) and 4.16(b) (2006). Br. at 14-15.
Third, with regard to his claim for service connection for a back injury, he contends that the
Board misinterpreted 38 U.S.C. § 1154(b) and the presumption of service connection under
38 U.S.C. § 105(a). Br. at 18-29. According to the appellant, section 1154(b), either alone, or
together with section 105(a), creates a presumption of service connection that eliminates a veteran's
need to submit medical nexus evidence, unless the presumption is rebutted by clear and convincing
evidence to the contrary. Id.In response to the appellant's first argument, the Secretary asserts that the VCAA does not
require VA to give notice upon a challenge to the downstream "effective date" element of a claim.
Secretary's (Sec'y) Br. at 10. At oral argument, the Secretary argued, in the alternative, that any
notice error was nonprejudicial because the appellant, through his counsel, demonstrated that he had
actual knowledge of what was necessary to substantiate his claim. Responding to the appellant's
second argument, the Secretary agrees that section 5110(b)(2) could apply to the effective date of
TDIU, if the TDIU claim arises in conjunction with evidence of a worsening of a service-connected
disability. Sec'y Supplemental (Suppl.) Br. at 8-9. He contends where the basis for the TDIU award
is satisfaction of the criteria established by 38 C.F.R. § 4.16, i.e., employability status, and not
worsening of the service-connected disability, section 5110(b)(2) is not implicated. Id. Finally, in
response to the appellant's third argument, the Secretary asserts that the presumptions created by
sections 1154(b) and 105(a) do not eliminate a veteran's burden to demonstrate a medical nexus
between a current disability and an injury or disease in service. Sec'y Br. at 16-17. Therefore, he
asserts that there exists a plausible basis to support the Board's denial of an award of service
connection for residuals of a back injury.
5
II. ANALYSIS
A. Compliance With the Duty To Notify
Pursuant to the VCAA, upon receipt of a complete or substantially complete application for
benefits and prior to an initial unfavorable decision on a claim by an agency of original jurisdiction,
the Secretary is required to inform the appellant of the information and evidence not of record that
(1) is necessary to substantiate the claim, (2) the Secretary will seek to obtain, if any, and (3) the
appellant is expected to provide, if any, and to request that the claimant provide any evidence in his
possession that pertains to the claim. See 38 U.S.C. § 5103(a); Pelegrini v. Principi, 18 Vet.App.
112, 119, 121 (2004); Quartuccio v. Principi, 16 Vet.App. 183, 187 (2002); 38 C.F.R. § 3.159(b)
(2006). Failure to comply with any of these requirements may be remandable error. Quartuccio,
16 Vet.App. at 183. If the Court finds such an error, it must "take due account of the rule of
prejudicial error." 38 U.S.C. § 7261(b)(2); see Conway v. Principi, 353 F.3d 1369, 1374-75 (Fed.
Cir. 2004 ); Overton v. Nicholson, 20 Vet.App. 427, 435-36, 443 (2006) (failure to provide claimant
notice of information necessary to substantiate claim has "natural effect of producing prejudice").
July 2003 letters from the RO were the only documents relied upon by the Board in
determining that VA had properly notified the appellant of the information and evidence necessary
to substantiate entitlement to an earlier effective date. R. at 7. Upon review of the record, the Court
notes that there is only one letter dated July 2003, and that letter did not address the appellant's award
of an increased disability rating for his PTSD and his award of TDIU, or what is necessary to warrant
an earlier effective date for those claims.2 R. at 507-12. There being in the record no pre-
adjudicatory letter relied upon by the Board as satisfying VA's duty to notify, the Court holds that
the Board erred in concluding that the duty to notify had been satisfied. R. at 8; see Locklear v.
Nicholson, 20 Vet.App. 410, 413 (2006) (Board findings regarding compliance with the duty to
notify are findings of fact reviewed under the "clearly erroneous" standard of review); see also
2
The Court notes that the record does contain a September 2003 letter that purports to
address the appellant's entitlement to an earlier effective date for his 70% disability rating for PTSD
and his award of TDIU. However, nothing in the September 2003 letter can be read as informing
him of what information and evidence is necessary to establish entitlement to an earlier effective
date. R. at 525-30.
6
Mayfield v. Nicholson, 444 F.3d 1328, 1335 (Fed. Cir. 2006) (whether a communication satisfies
section 5103(a) is a "substantially factual determination").
Having found error, the Court must "take due account of the rule of prejudicial error."
38 U.S.C. § 7261(b)(2); see Conway, 353 F.3d at 1374-75; Overton 20 Vet.App. at 434-38. Here,
the Secretary asserts that any notice error was not prejudicial because the appellant, through his
counsel, demonstrated actual knowledge of the information and evidence necessary to substantiate
his claim. See Overton, 20 Vet.App. at 438 (holding that counsel's actions and communications to
VA are factors to consider when determining whether a claimant had a meaningful opportunity to
effectively participate in the processing of his claim). The Court agrees.
Significantly, as can be gleaned from the record, appellate counsel has been representing Mr.
Dalton at the RO, in pursuit of an increased disability rating for his PTSD, since approximately 1998.
R. at 129-32, 140-41, 144-46, 157-59, 186-87, 194-96, 279-80, 457-63, 491-92, 533-39, 546-47.
Counsel has also been representing him in pursuit of an award of TDIU and assignment of an earlier
effective date for that award since 2000. R. at 279-80, 457-63, 491-92, 533-39, 546-47. The crux
of the appellant's argument is that, at the time of the initial adjudication in January 2001, he believed
that he had submitted sufficient evidence, and VA had not given him any reason to believe that the
evidence of record would not prove his claim. The problem with the appellant's argument is that it
misunderstands the scope of the notice required by the VCAA. As we recently held in Locklear,
supra, VA is not required to provide a claimant with a predecisional adjudication. See Locklear,
20 Vet.App. at 415-16. In other words, the VCAA notice requirement deals with evidence gathering
and does not require VA "to rule on the probative value of information and evidence presented in
connection with a claim prior to rendering a decision on the merits of the claim itself." Id. at 416;
see also Dingess v. Nicholson, 19 Vet.App. 473, 490 (2006) ("Within the VA adjudicatory scheme,
section 5103(a) is focused on notice that is required to be provided to a claimant upon receipt of a
complete or substantially complete application for benefits and prior to an initial adjudication.").
We are also convinced that the appellant, through his counsel, demonstrated actual
knowledge of the information and evidence necessary to establish entitlement to an earlier effective
date. In particular, the arguments the appellant presented to the RO in his January 2002 NOD
demonstrate his awareness of the need for medical evidence "to determine whether or not it is
7
factually ascertainable that the veteran's condition increased in severity" and whether he was "unable
to perform substantial gainful employment" prior to June 20, 2000, the effective date initially
assigned. R. at 461.
These matters were remanded by the Board in June 2003 for additional development and
compliance with the VCAA, and were subsequently readjudicated by the RO in the August 2003
SSOC. R. at 501-05, 515-23; see Prickett v. Nicholson, 20 Vet.App. 370, 377 (2006). Therefore,
because the record demonstrates that the appellant, through his counsel, was aware of the
information and evidence necessary to establish entitlement to an earlier effective date prior to the
remedial remand, we conclude that the appellant was afforded a meaningful opportunity to
effectively participate in the adjudication of his claims for an earlier effective date for his 70%
disability rating for PTSD and award of TDIU. Hence, we conclude that he was not prejudiced by
VA's failure to satisfy the duty to notify prior to the initial adjudication. See 38 U.S.C. § 7261;
Conway and Overton, both supra. There being no other error asserted as to the denial of an earlier
effective for his 70% disability rating for PTSD, the Board's decision on that matter will be affirmed.
The appellant's entitlement to an earlier effective date for his TDIU award is addressed below.
B. Entitlement to an Earlier Effective Date for TDIU
In the instant case, the Board determined that "[e]ntitlement to an effective date earlier than
June 20, 2000[,] for the award of TDIU [was] not shown as a matter of law." R. at 5 (citing
38 U.S.C. § 5110(a)). In reaching this determination, the Board focused on June 20, 2000, as the
date of the claim for TDIU, and searched the record for any prior formal or informal claim. R. at 20-
21. Because there was no evidence of an intent to apply for TDIU benefits prior to June 20, 2000,
the Board concluded that June 20, 2000, was the appropriate effective date. R. at 21.
There is no dispute on appeal that June 20, 2000, was the date of the appellant's claim for
TDIU. The question presented by this appeal is whether the grant of an application for TDIU is an
award of increased compensation governed by the provisions of 38 U.S.C. § 5110(b)(2) for purposes
of assignment of an effective date? In other words, when assigning the effective date, must the
Board consider whether it is factually ascertainable that an increase in disability sufficient to support
the award occurred in the one year prior to the application for TDIU?
8
1. Statutory and Regulatory Provisions
Section 5110(a) of title 38, U.S. Code, governs the assignment of an effective date for an
award of benefits:
Unless specifically provided otherwise in this chapter, the effective date of an award
based on an original claim, a claim reopened after final adjudication, or a claim for
increase, of compensation, dependency and indemnity compensation, or pension,
shall be fixed in accordance with the facts found, but shall not be earlier than the date
of receipt of application therefor.
38 U.S.C. § 5110(a). The Secretary's implementing regulation similarly states that the effective date
shall be the date of receipt of claim or the date entitlement arose, whichever is later, unless the claim
is received within one year after separation from service. See 38 C.F.R. § 3.400.
An exception to this general rule occurs when there is an award of increased compensation.
"The effective date of an award of increased compensation shall be the earliest date as of which it
is ascertainable that an increase in disability had occurred, if application is received within one year
from such date." 38 U.S.C. § 5110(b)(2); see also Harper v. Brown, 10 Vet.App. 125, 126 (1997)
(finding exception in section 5110(b)(2) limited to instances where the increase in service-connected
disability precedes the claim); 38 C.F.R. § 3.400(o)(2). Again, the Secretary's implementing
regulation, like the statute, provides that the effective date shall be the "[e]arliest date it is factually
ascertainable that an increase in disability had occurred if claim is received within [one] year from
such date otherwise, date of receipt of claim." 38 C.F.R. § 3.400(o)(2).
2. The Parties' Arguments
The appellant contends that an award of TDIU is an award of increased compensation, and
therefore, the Board must consider whether it is factually ascertainable that an increase in disability
occurred within one year prior to the application. Br. at 12-13. The Secretary concedes that there
may be instances where the provisions of 38 U.S.C. § 5110(b)(2) are implicated, e.g., when the
TDIU claim arises in conjunction with the worsening of a service-connected disability. Sec'y Suppl.
Br. at 8-9. However, the Secretary suggests that, because an award of TDIU is based on a finding
of individual unemployability, not all awards of TDIU result from an increase in disability, and
therefore, not every award falls within the exception provided in section 5110(b)(2). Id.9
Notwithstanding this general caveat, on the facts of this case, the Secretary conceded at oral
argument that the appellant's award of TDIU was based in part on a worsening of the appellant's
service-connected PTSD and his inability to maintain substantially gainful employment as a result
of that condition. Nonetheless, the Secretary continues to maintain that a remand is not warranted
because, he asserts, the Board applied section 5110(b)(2) and that there is no factual basis in the
record for the grant of an earlier effective date. In this regard, the Secretary contends that the
medical evidence demonstrates that the appellant's PTSD worsened in July 2000, after the claim for
TDIU was filed. Finally, he asserts that the appellant could not have met the criteria for TDIU earlier
than the date of his increased schedular rating for PTSD, because the appellant was rated only 50%
disabled prior to June 20, 2000. See 38 C.F.R. § 4.16(a) (generally requiring a single service-
connected disability to be rated at 60% or more for an award of TDIU).
First, we address whether we agree that the provisions of section 5110(b)(2) apply to the
appellant's award of TDIU. Then, we discuss and reject the Secretary's assertions that a remand is
not warranted under these circumstances.
3. TDIU–an Award of Increased Compensation
To be eligible for a TDIU rating, a claimant must be unemployable as a result of
service-connected disabilities. Pursuant to 38 C.F.R. § 4.16(a), a veteran who is unable to secure
or follow a substantially gainful occupation because of service-connected disabilities and who has
either one service-connected disability rated at least 60% or multiple service-connected disabilities
yielding a combined rating of 70% or more (with at least one of those disabilities rated 40% or more)
is eligible for a TDIU rating. In addition, "veterans who are unemployable by reason of
service-connected disabilities, but who fail to meet the percentage standards set forth in [38 C.F.R.
§ 4.16(a)]" should be given extraschedular consideration. 38 C.F.R. § 4.16(b).
As stated above, the question presented by this appeal is whether an award of TDIU is an
award of increased compensation for purposes of assigning an effective date pursuant to 38 U.S.C.
§ 5110(b)(2). In the instant case, the award of TDIU was based on 38 C.F.R. § 4.16(a)–in January
2001, the RO determined that the appellant was unable to secure or follow a substantially gainful
occupation as a result of service-connected disabilities and at the time increased the appellant's
disability rating for service-connected PTSD from 50% to 70%, meeting the TDIU eligibility
10
requirement that a veteran have a service-connected disability rating of at least 60%. The Secretary
concedes, and the Court agrees, that under the facts presented by this appeal, the appellant's award
of TDIU was an award of increased compensation. Therefore, the Board was required to consider
and apply 38 U.S.C. § 5110(b)(2). The basis for our conclusion can be found in our caselaw.
Generally, in the context of an award of increased compensation, we have held that "[s]ection
5110(b)(2) is invoked only where it has been determined that the evidence warrants an increase to
the next disability level." Hazan v. Gober, 10 Vet.App. 511, 519 (1997). In Wood (Clarence) v.
Derwinski, we found that an application "for unemployability compensation [is] an application for
'increased compensation' within the meaning of [section 5110(b)(2)]." 1 Vet.App. 367, 369 (1991).
In reaching that determination, we explained that the appellant, who was already rated 60% disabled
for his service-connected residuals of lumbar spine fusions, was "merely attempting to show that his
condition was more incapacitating than the level at which it was then evaluated." Id. at 368-69; see
also Green v. Brown, 10 Vet.App. 111, 119 (1997) ("[S]ection 5110(b)(2) plainly applies after its
enactment to the hypothetical veteran who, claiming an increase in disability, is awarded a TDIU
rating."). Consistent with our holding in Wood (Clarence), supra, we reiterated in Norris v. West,
that "under the VA statutory and regulatory scheme evidence of a veteran's unemployability arising
from an already allowed service-connected disability is indeed evidence of an increase in the severity
of that disability." 12 Vet.App. 413, 420 (1999); see also Hurd v. West, 13 Vet.App. 449, 451-52
(2000) (applying rules governing effective dates for increased ratings to TDIU award).
Initially, we note that there can be no doubt that an award of TDIU to a veteran who was
previously rated less than 100% disabled is an "increase" in compensation. See Norris, 12 Vet.App.
at 420 (informal claim for TDIU is, in essence, a claim for an increased rating). This conclusion is
supported by the Secretary's form, VA Form 21-8940, entitled "Veteran's Application for Increased
Compensation Based on Individual Unemployability." R. at 282 (emphasis added). Second, as we
stated in Norris and Wood (Clarence), both supra, an already service-connected veteran who
becomes unable to secure or follow a substantially gainful occupation as a result of that service-
connected disability has logically undergone an increase in disability. The veteran has gone from
a state of being able to secure or follow a substantially gainful occupation, though not necessarily
employed, to being unable to secure or follow a substantially gainful occupation.
11
Moreover, we are not persuaded by the Secretary's suggestion that application of section
5110(b)(2) to awards of TDIU is limited to those circumstances where there is a concomitant
increase in the claimant's schedular disability rating. Although an increase to the next disability level
during the one year prior to receipt of the claim is generally required for application of section
5110(b)(2), see Hazan, supra, in the context of an award of TDIU, an increase in the claimant's
schedular rating for his service-connected disability is not necessarily required. That is because an
award of TDIU pursuant to 38 U.S.C. § 4.16(a) requires both (1) a single service-connected disability
rated at 60% or more (or multiple service-connected disabilities yielding a combined rating of 70%
or more, with at least one of those disabilities rated 40% or more), and (2) an inability to secure or
follow a substantially gainful occupation. For purposes of section 5110(b)(2), both criteria of a
TDIU rating under § 4.16(a) are types of disabilities, and, therefore, provided that both criteria to
support an award of TDIU are present during the applicable period, it is irrelevant which of the two
criteria first became factually ascertainable. If it can be ascertained that either or both criteria
manifested during the one year prior to receipt of the claim, then the "increase in disability"
requirement of 38 U.S.C. § 5110(b)(2) is satisfied.
By this opinion, we do not intend to answer the question whether every award of TDIU is an
award of increased compensation. We recognize that under some circumstances an award of TDIU
may not amount to an award of increased compensation; for example, TDIU may be awarded as part
of an initial award of disability compensation benefits. Therefore, our holding is limited to the
factual scenario presented: The grant of an application for TDIU based on an inability to secure or
follow a substantially gainful occupation as a result of an already service-connected disability and
the concession by the Secretary that the TDIU award was based in part on the worsening of the
service-connected PTSD.
Accordingly, we hold that a claimant awarded TDIU based on an already service-connected
condition, which later renders him unable to secure or follow a substantially gainful occupation, is
entitled to consideration of an effective date pursuant to section 5110(b)(2). See Norris, 12 Vet.App.
at 421-22 (evidence of unemployability due to a 70% disability rating reasonably raised TDIU
claim); Green and Wood (Clarence), both supra. Hence, the Board is required to search the record
to determine whether it is factually ascertainable that in the one year prior to the application there
12
was an increase in disability. See Scott v. Brown, 7 Vet. App. 184, 189 (1994) (approving Board's
consideration of "all the evidence of record" for the year preceding the claim to ascertain whether
disability increased in severity). As set forth above, an increase in disability can be demonstrated
through satisfaction of either or both criteria of § 4.16(a).
4. Application of Law to Facts
In the instant case, the Board erred when it concluded "as a matter of law" that entitlement
to an earlier effective date for TDIU had not been established. R. at 5 (quoting Board (emphasis
added)). Moreover, we are not convinced that the Board considered section 5110(b)(2) as it was
required to do. First, the Board did not cite section 5110(b)(2) when reaching its determination on
this matter. R. at 5. In fact, when it concluded, "as a matter of law," that entitlement to an earlier
effective date for TDIU had not been established, the Board specifically cited only to section
5110(a). Id. (emphasis added). Second, contrary to the Secretary's position, the Court is unable to
discern from the Board's reasons or bases that it considered whether it was factually ascertainable
that in the year prior to the application for TDIU there was an increase in disability. Although it
appears that the Board may have searched the record for an informal claim or an intent to apply for
TDIU prior to June 20, 2000 (R. at 20), it is not entirely clear that the Board reviewed the record with
an eye toward whether the appellant's PTSD alone rendered him unable to secure or follow a
substantially gainful occupation in that one-year period. Compare R. at 20 (Board's conclusory
assertion that records regarding the period before June 20, 2000, reflect unemployability due to low-
back disability), with R. at 291 (RO's conclusory assertion that evidence received shows appellant
unable to work since 1994 as a result of PTSD). Whether an increase in disability occurred in the
year prior to the application for TDIU, by its very nature, is a factual determination that must be
made by the Board in the first instance. See Hensley v. West, 212 F.3d 1255, 1263-64 (Fed. Cir.
2000) (court of appeals may remand if it determines that lower tribunal failed to make finding of fact
essential to decision); Wanless v. Principi, 18 Vet.App. 337, 337 (2004) (per curiam order); see also
38 U.S.C. § 7104(d)(1); Sammarco v. Derwinski, 1 Vet.App. 111, 113-14 (1991) ("Whether the
B[oard's] ultimate conclusions are correct or not, . . . the incomplete nature of the decision below
does not permit proper review by this Court.").
13
Furthermore, that the increase in the appellant's PTSD disability rating from 50% to 70% and
award of TDIU seemingly was based on the July 2000 VA compensation and pension examination
does not relieve the Board of its responsibility to review the evidence of record to ascertain whether
an increase in disability occurred in the one year prior to the application. See Servello v. Derwinski,
3 Vet.App. 196, 200 (1992) (although increased rating was based upon evidence submitted
subsequent to application for increased rating, Board erred in not considering evidence about status
of condition during one-year period prior to application). Therefore, because the Board failed to
determine whether both criteria for TDIU under 38 C.F.R. § 4.16(a) were present during the one-year
period prior to June 20, 2000, with either one first becoming ascertainable at any time during that
period, the Court will remand the matter for application of 38 U.S.C. § 5110(b)(2) and 38 C.F.R.
§ 3.400(o)(2). See Schafrath v. Derwinski, 1 Vet.App. 589, 592-93 (1991) (stating that the Board
must consider and discuss all applicable provisions of law and regulation where they are made
"potentially applicable through the assertions and issues raised in the record").
Further, we are not persuaded by the Secretary's argument that the appellant is not entitled
to an effective date for TDIU earlier than the effective date of his 70% disability rating for PTSD.
In making this argument, the Secretary ignores 38 C.F.R. § 4.16(b) (extraschedular TDIU), which
does not contain the 60% disability rating criterion of § 4.16(a). On appeal, the appellant also argues
that the Board erred when it failed to consider and apply the holdings in Roberson and Bowling, both
supra, and 38 C.F.R. §§ 3.340(a) and 4.16(b). Nonetheless, because the appellant makes a terse
argument in his opening brief on this matter and inasmuch as a finding of error will not result in a
remedy broader than a remand, the Court will not address this assertion of error. See Mahl v.
Principi, 15 Vet.App. 37, 38 (2001) (holding that, when remand is appropriate, the Court need not
"analyze and discuss all the other claimed errors that would result in a remedy no broader than a
remand"); cf. Coker v. Nicholson, 19 Vet.App. 439, 442 (2006) (appellant must plead with some
particularity the allegation of error so the Court is able to review and assess the validity of the
appellant's arguments). We, therefore, leave open the questions whether the appellant is entitled to
a TDIU award based on § 4.16(b) and what criteria must be met for application of section 5110(b)(2)
in connection with a TDIU award based on § 4.16(b). "A narrow decision preserves for the appellant
an opportunity to argue those claimed errors before the Board at the readjudication, and, of course,
14
before this Court in an appeal, should the Board rule against him." Best v. Principi, 15 Vet.App. 18,
20 (2001). On remand, the appellant is free to submit additional evidence and argument and the
Board must consider any such evidence or argument submitted. See Kay v. Principi, 16 Vet.App.
529, 534 (2002); Kutscherousky v. West, 12 Vet.App. 369, 372-73 (1999) (per curiam order).
C. Service Connection for a Back Disability
Establishing service connection generally requires (1) medical evidence of a current
disability; (2) medical or, in certain circumstances, lay evidence of in-service incurrence or
aggravation of a disease or injury; and (3) medical evidence of a nexus between the claimed
in-service disease or injury and the present disability. See Hickson v. West, 12 Vet.App. 247, 253
(1999); Caluza v. Brown, 7 Vet.App. 498, 506 (1995), aff'd per curiam, 78 F.3d 604 (Fed. Cir. 1996)
(table); 38 C.F.R. § 3.303(a) (2006).
A finding of service connection is a finding of fact reviewed under the "clearly erroneous"
standard of review set forth in 38 U.S.C. § 7261(a)(4). See Russo v. Brown, 9 Vet.App. 46, 50
(1996); Swann v. Brown, 5 Vet.App. 229, 232 (1993). "A factual finding 'is "clearly erroneous"
when although there is evidence to support it, the reviewing court on the entire evidence is left with
the definite and firm conviction that a mistake has been committed.'" Hersey v. Derwinski,
2 Vet.App. 91, 94 (1992) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).
The Court may not substitute its judgment for the factual determinations of the Board on issues of
material fact merely because the Court would have decided those issues differently in the first
instance. See id. In addition, the Board is required to provide a written statement of the reasons or
bases for its findings and conclusions on all material issues of fact and law presented on the record;
the statement must be adequate to enable a claimant to understand the precise basis for the Board's
decision, as well as to facilitate review in this Court. See 38 U.S.C. § 7104(d)(1); Allday v. Brown,
7 Vet.App. 517, 527 (1995); Gilbert v. Derwinski, 1 Vet.App. 49, 57 (1990). To comply with this
requirement, the Board must analyze the credibility and probative value of the evidence, account for
the evidence that it finds persuasive or unpersuasive, and provide the reasons for its rejection of any
material evidence favorable to the claimant. See Caluza, 7 Vet.App. at 506; Gabrielson v. Brown,
7 Vet.App. 36, 39-40 (1994).
15
1. Statutory and Regulatory Provisions
Section 1154(b) of title 38, U.S. Code, eases the evidentiary burden of combat veterans by
permitting the use, under certain circumstances, of lay evidence. Section 1154(b) provides:
In the case of any veteran who engaged in combat with the enemy in active service
with a military, naval, or air organization of the United States during a period of war,
campaign or expedition, the Secretary shall accept as sufficient proof of service-
connection of any disease or injury alleged to have been incurred in or aggravated by
such service satisfactory lay or other evidence of service incurrence or aggravation
of such injury or disease, if consistent with the circumstances, conditions, or
hardships of such service, notwithstanding the fact that there is no official record of
such incurrence or aggravation in such service, and, to that end, shall resolve every
reasonable doubt in favor of the veteran. Service connection of such injury or disease
may be rebutted by clear and convincing evidence to the contrary. The reasons for
granting or denying service connection in each case shall be recorded in full.
38 U.S.C. § 1154(b). The Secretary's implementing regulation similarly provides as follows:
Satisfactory lay or other evidence that an injury or disease was incurred or aggravated
in combat will be accepted as sufficient proof of service connection if the evidence
is consistent with the circumstances, conditions or hardships of such service even
though there is no official record of such incurrence or aggravation.
38 C.F.R. § 3.304(d) (2006).
2. Combat Veterans and Section 1154(b)
Section 1154(b) has been interpreted to reduce the evidentiary burden for combat veterans
with respect to evidence of in-service incurrence or aggravation of an injury or disease; it is not, as
the appellant argues, equivalent to a statutory presumption that the claimed condition is service
connected. See Collette v. Brown, 82 F.3d 389, 392 (Fed. Cir. 1996) ("Section 1154(b) does not
create a statutory presumption that a combat veteran's alleged disease or injury is
service-connected."); see also Jensen v. Brown, 19 F.3d 1413, 1416-17 (Fed.Cir. 1994) (noting that
section 1154(b) "evinces a strong intent to provide generously for the service-connected disabilities
of combat veterans by liberalizing the methods of proof allowed"); Wade v. West, 11 Vet.App. 302,
304-05 (1998) (discussing Colette and subsequent decisions of this Court interpreting section
1154(b) as reducing the evidentiary burden only as to the question of in-service incurrence). In other
words, under section 1154(b), lay statements may be sufficient to establish the in-service incurrence
of an injury or disease, but application of that section does not alter the fundamental requirements
16
of a current disability or a medical nexus to service (the first and third Hickson, supra, elements,
respectively). See Libertine v. Brown, 9 Vet.App. 521, 523-24 (1996); Caluza, 7 Vet.App. at 507-08.
Therefore, a veteran who establishes in-service incurrence of an injury or disease through application
of section 1154(b) must nonetheless submit "sufficient evidence of a causal nexus between that in-
service event and his or her current disability as required by Caluza." See Wade, 11 Vet.App. at 305;
see also Huston v. Principi, 18 Vet.App. 395, 402 (2004); Clyburn v. West, 12 Vet.App. 296, 303
(1999) (holding that the provisions of section 1154(b) do not provide a substitute for medical nexus
evidence).
Although the appellant dedicated a large portion of his brief to inviting the Court to adopt
a change in existing law, i.e., one which would read section 1154(b) as eliminating the need for
medical nexus evidence, we see no reason to depart from the Court's current interpretation of the
benefit bestowed by 38 U.S.C. § 1154(b). The appellant seemed to concede as much during oral
argument when he recognized that the right to receive compensation from VA requires evidence of
a medical nexus between an in-service event and current disability. Moreover, because the Board
failed to provide an adequate statement of reasons or bases for its conclusion regarding the second
Hickson element, the matter must be remanded for readjudication. Therefore, we also deem it
unnecessary to accept the appellant's invitation.
3. The Board's Reasons or Bases
In the decision on appeal, the Board denied the appellant's claim for service connection for
a back disability upon finding that he had failed to satisfy the second Hickson element–in-service
incurrence or aggravation of a disease or injury. R. at 14. In reaching this conclusion, the Board
acknowledged the appellant's contention that he had injured his back during service in Vietnam and
proceeded to analyze his claim pursuant to section 1154(b). Initially, the Board noted that the
appellant's SMRs and separation examination report do not indicate that he had suffered a back
injury during service. R. at 13. Both his entrance and separation examination reports state that his
spine was evaluated as normal. Moreover, a separation report of medical history prepared by the
appellant shows that he denied back trouble of any kind. To the extent that his SMRs show
treatment for a "left flank contusion," the Board reasoned that the lack of subsequent treatment
records, and no notation of back problems on separation, either by the appellant or the examiner, lead
17
"the Board to conclude that, even if this injury were to the back (rather than to the ribs or 'left flank'),
it was transient in nature, and was not productive of a chronic disability." R. at 13.
The Board's analysis is faulty for a number of reasons. First, the Board failed to determine
whether the appellant's lay evidence was satisfactory. See Collette, 82 F.3d at 393 (finding that
section 1154(b) requires a three-step sequential analysis); see also Caluza, 7 Vet.App. at 507
(holding that section 1154(b) permits a combat veteran to establish in-service incurrence of an injury
or disease through "lay or other evidence" if (1) the evidence is satisfactory; (2) the evidence is
consistent with the circumstances, conditions or hardships of service; and (3) it can prevail
notwithstanding the fact that there is no official record of the incurrence during service). Satisfactory
evidence is evidence that is credible. See id. at 510-11. "Credible evidence" is "that which is
plausible or capable of being believed." Id. at 506; see also Collette, 82 F.3d at 392.
Determinations of credibility are findings of fact to be made by the Board in the first instance.
See Caluza, 7 Vet.App. at 512; Layno v. Brown, 6 Vet.App. 465, 469 (1994) (finding that the weight
and credibility of evidence "is a factual determination going to the probative value of the evidence
to be made after the evidence has been admitted"); see also Wood (Bruce) v. Derwinski, 1 Vet.App.
190, 193 (1991) ("The [Board] has the duty to assess the credibility and weight to be given to the
evidence."). In making a determination of whether the section 1154(b) presumption has been
triggered, the Board is not permitted to weigh the veteran's lay evidence against contrary evidence.
See Collette, 82 F.3d at 394. Nor may the Board rely on the absence of an official record to find the
lay evidence not credible because that would be inconsistent with the purpose of section 1154(b).
See Dambach v. Gober, 223 F.3d 1376, 1380-81 (Fed.Cir. 2000); see also Buchanan v. Nicholson,
451 F.3d 1331, 1337 (Fed. Cir. 2006) (holding that the lack of contemporaneous medical records
does not, in and of itself, render lay evidence not credible); Caluza, 7 Vet.App. at 511 (in
determining whether lay evidence is satisfactory the Board may properly consider internal
consistency, facial plausibility, and consistency with other evidence submitted on behalf of the
veteran).
Rather than make this necessary credibility determination, the Board prematurely concluded
that "the preponderance of the evidence does not demonstrate that the veteran incurred an in-service
back injury or that, if he did, it was other than transient in nature and [was] resolved without any
18
residual disability." R. at 14. With respect to the Board's first conclusion that the preponderance of
the evidence does not demonstrate that the appellant incurred an in-service back injury, we are
unable to discern from the Board's reasoning whether it determined that the appellant's lay evidence
was not credible, or whether it accepted the lay evidence as credible, but found that there was
evidence to the contrary that weighed against finding an in-service back injury. Moreover, in the
absence of a finding that the lay evidence was not satisfactory, the Board should have proceeded to
analyze whether the alleged in-service injury was consistent with the circumstances, conditions, or
hardships of service. See Collette, supra. Given this failure, the Board's statement of reasons or
bases does not facilitate judicial review nor is it helpful to understanding the basis for the Board's
decision.
With respect to the Board's alternative conclusion that any in-service back injury "was
apparently transient in nature," this finding is a medical conclusion that the Board is not competent
to make. R. at 14; see McLendon v. Nicholson, 20 Vet.App. 79, 85 (2006) ("The Board also erred
in its finding that Mr. McLendon's in-service back injury was acute without chronic residual
disability. Having found that Mr. McLendon suffered an in-service back injury, the degree of that
injury and whether any disabilities resulted therefrom are medical assessments that the Board is not
competent to render in the first instance."); see also Colvin v. Derwinski, 1 Vet.App. 171, 175 (1991)
(holding that the Board may consider only independent medical evidence in support of its findings
and may not substitute its own medical opinion).
Finally, to the extent the Board concluded that the third Hickson element–medical nexus–was
not satisfied, the Board improperly relied on an inadequate medical examination to reach this
conclusion. The Board relied on the report of an April 2003 VA examination to conclude that "the
record contains a medical conclusion by which the idea of a nexus between the veteran's current back
disability and his military service is expressly rejected." R. at 15. The examination report contains
the following conclusion: "After full review of [the claims] file and [SMRs], I see no evidence of any
back injury while in service and it is my medical opinion that it is not likely that the veteran's present
back problems are related to his military service." R. at 498 (emphasis added). A plain reading of
this sentence suggests that the sole premise for the examiner's conclusion was the lack of notation
or treatment of a back injury in service. Indeed, it appears that the medical examiner impermissibly
19
ignored the appellant's lay assertions that he had sustained a back injury during service. See R. at
496 (examiner recorded appellant's assertion that he had injured his back when an ammunition dump
exploded, he was thrown by the force, and landed on his back); see also Buchanan, 451 F.3d at 1336(noting that VA's examiner's opinion, which relied on the absence of contemporaneous medical
evidence, "failed to consider whether the lay statements presented sufficient evidence of the etiology
of [the veteran's] disability such that his claim of service connection could be proven"); Coburn v.
Nicholson, 19 Vet.App. 427, 432 (2006) ("[R]eliance on a veteran's statement renders a medical
report incredible only if the Board rejects the statements of the veteran."); Reonal v. Brown,
5 Vet.App. 458, 460-61 (1993) (a medical opinion based on an inaccurate factual premise has no
probative value); cf. Mariano v. Principi, 17 Vet.App. 305, 312 (2003) (holding that VA medical
examiner's conclusions were of "questionable probative value" because examiner failed to consider
certain information).
Although a medical opinion based on recitations of a claimant that have been rejected by the
Board is of little probative value, see Coburn and Reonal, both supra, the Board's consideration of
the third Hickson element in this case specifically assumed an in-service back injury. R. at 15
("[E]ven if the Board were to assume, for the purpose of this discussion only, that the veteran did
incur an in-service back injury, the medical evidence fails to demonstrate a nexus between such
assumed injury and his current disability."). Ipso facto, the medical examiner cannot rely on the
absence of medical records corroborating that injury to conclude that there is no relationship between
the appellant's current disability and his military service. See Smith v. Derwinski, 2 Vet.App. 137,
140 (1992) (noting that the purpose of section 1154(b) was "to overcome the adverse effect of a lack
of official record of incurrence or aggravation of a disease or injury and treatment thereof" (citing
H.R. Rep. No. 1157, 77th Cong., 1st Sess. (1941), reprinted in 1941 U.S.C.C.A.N. 1035)).
Therefore, in readjudicating on remand the appellant's claim for service connection for a back
disability, if the Board determines that the evidence establishes in-service occurrence of a back
injury, because the April 2003 VA examination was inadequate, VA's duty to assist requires VA to
provide the appellant with an adequate medical examination of his back. See 38 U.S.C. § 5103A(d);
R. at 494 (February 2003 Board determination that a medical examination was needed regarding the
issue of service connection for residuals of a back injury).
20
Given this disposition, the Court will not address the remaining arguments and issues raised
by the appellant. See Best, 15 Vet.App. at 20. On remand, the appellant is free to submit additional
evidence and argument and the Board must consider any such evidence or argument submitted. See
Kay, 16 Vet.App. at 534; Kutscherousky, 12 Vet.App. at 372-73. The Board shall proceed
expeditiously, in accordance with 38 U.S.C. §§ 5109B, 7112 (West Supp. 2006) (requiring Secretary
to provide for "expeditious treatment" of claims remanded by the Court).
III. CONCLUSION
Upon consideration of the foregoing analysis, the record on appeal, and the parties' briefs,
the May 12, 2004, Board decision is AFFIRMED as to the Board's denial of an earlier effective date
for the 70% disability rating for PTSD, VACATED as to the Board's denial of an effective date
earlier than June 20, 2000, for the award of TDIU and as to the Board's denial of service connection
for residuals of a back injury, and the two matters are REMANDED for readjudication consistent
with this opinion.
21