Sally E. Friedlund v. R. James Nicholson

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS
NO . 04-0887
SALLY E. FRIEDLUND , APPELLANT ,
V.
R. JAMES NICHOLSON ,
SECRETARY OF VETERANS AFFAIRS, APPELLEE.
On Appeal from the Board of Veterans' Appeals
(Decided July 23, 2007 )
Daniel D. Wedemeyer, of West Hills, California, was on the briefs for the appellant.
Catherine A. Chase, with whom Tim S. McClain, General Counsel; R. Randall Campbell,
Assistant General Counsel; and Carolyn F. Washington, Deputy Assistant General Counsel, all of
Washington, D.C., were on the brief for the appellee.
Catherine A. Chase, with whom John H. Thompson, Acting General Counsel; R. Randall
Campbell, Assistant General Counsel; and Carolyn F. Washington, Deputy Assistant General
Counsel, all of Washington, D.C., were on the appellee's motion for reconsideration, or, in the
alternative, for panel review.
Before HAGEL, MOORMAN, and LANCE, Judges.
MOORMAN, Judge: The appellant, Sally E. Friedlund, the surviving spouse of the veteran,
Robert G. Friedlund, appeals through counsel a May 12, 2004, Board of Veterans' Appeals (Board)
decision that denied entitlement to increased dependency and indemnity compensation (DIC)
benefits pursuant to 38 U.S.C. § 1311(a)(2) based on a finding that a March 1987 VA regional office
(RO) decision that denied the veteran a total disability rating for post-traumatic stress disorder
(PTSD) was not the product of clear and unmistakable error. Record (R.) at 1-7. On September 1,
2006, the Court issued a single-judge memorandum decision vacating the May 2004 Board decision
and remanding for further proceedings. On September 21, 2006, the Secretary filed a motion for
reconsideration of the September 1, 2006, decision, or, in the alternative, for a panel decision. For
the reasons that follow, the Court will grant the Secretary's motion for reconsideration, withdraw the
Court's September 1, 2006, memorandum decision, and issue this decision in its stead.
I. BACKGROUND
The veteran, Robert G. Friedlund, served on active duty in the U.S. Army from November
1966 to November 1968. R. at 11. In June 1983, the Board denied the veteran's claim for service
connection for PTSD. R. at 116-23. He appealed the denial, and the Board ultimately granted
service connection for PTSD in January 1987. R. at 231-38. In March 1987, the RO assigned a 50%
disability rating for the veteran's service-connected PTSD, effective December 29, 1983. R. at 240-
41. This decision became final. R. at 287, 300. On June 8, 1995, the veteran died from a drug
overdose, at which time he had a claim pending for an increased disability rating for PTSD. R. at
468. The veteran was not service-connected for any other disability during his lifetime.
In July 1995, Mrs. Friedlund submitted an application for DIC, asserting that she was entitled
to DIC pursuant to 38 U.S.C. § 1310 because her husband's service-connected PTSD caused his fatal
drug overdose.1 R. at 464-67. In February 1996, the RO denied, inter alia, her claim for DIC
because the evidence failed to show that the veteran's death was related to service. R. at 474-75.
Mrs. Friedlund, through counsel, appealed this decision to the Board, and, in the alternative, argued
that the Board should award her DIC benefits under 38 U.S.C. § 1318 because the veteran would
have been entitled to receive a total disability rating for his service-connected PTSD for a period of
ten years or more immediately preceding his death but for the existence of clear and unmistakable
error in the March 1987 RO decision.2 R. at 524-33. In April 1998, the Board granted a 100%
1
38 U.S.C. § 1310 provides for the payment of DIC benefits to the survivor of a veteran who died from a
service-connected disability. See 38 U.S.C. § 1310(a); Dyment v. West, 13 Vet.App. 141 (1999), aff'd sub nom. Dyment
v. Principi, 287 F.3d 1377 (Fed. Cir. 2002); 38 C.F.R. § 3.312(a) (2006).
2
38 U.S.C. § 1318 provides for the payment of DIC benefits to the survivor of a veteran whose death was not
caused by a service-connected disability only if the veteran was in receipt of or was entitled to receive disability
compensation at the time of death for a service-connected disability that was continuously rated totally disabling for a
period of 10 years or more immediately preceding death. See 38 U.S.C. § 1318(b)(1); 38 C.F.R. § 3.22(a)(2)(i), (b)(1)
(2006) (providing that a veteran's survivors are entitled to receive DIC benefits pursuant to 38 U.S.C. § 1318 if the
"veteran would have received total disability compensation at the time of death for a service-connected disability rated
totally disabling for [a continuous period of at least 10 years immediately preceding death] but for clear and unmistakable
error committed by VA in a decision on a claim filed during the veteran's lifetime").
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disability rating for PTSD for the two years prior to the veteran's death for the purposes of accrued
benefits and remanded for readjudication Mrs. Friedlund's claims for DIC benefits under 38 U.S.C.
§§ 1310 and 1318. R. at 559-61. In August 1999, the Board denied entitlement to DIC benefits
under both theories of entitlement – section 1310 and section 1318 – because it determined that the
veteran's death was due to his own willful misconduct. R. at 595-603. Mrs. Friedlund appealed that
decision, and, in February 2000, this Court vacated the decision and remanded, following a joint
motion for remand stating that the Board failed to provide an adequate statement of reasons or bases
for, inter alia, its finding that no medical evidence associated the veteran's drug abuse with his
service-connected PTSD. R. at 606, 609.
In January 2001, the Board determined that the veteran's drug overdose was related to his
service-connected PTSD and awarded DIC benefits pursuant to 38 U.S.C. § 1310.3 R. at 622-25.
In doing so, the Board denied as moot Mrs. Friedlund's claim for entitlement to DIC benefits
pursuant to 38 U.S.C. § 1318. R. at 625. In December 2001, Mrs. Friedlund disagreed with a
subsequent RO decision that implemented the January 2001 Board decision and argued that she was
entitled to DIC benefits pursuant to 38 U.S.C. § 1311(a)(2). R. at 638. In May 2004, the Board
issued the decision on appeal in which it denied entitlement to DIC benefits under 38 U.S.C.
§ 1311(a)(2) based on a finding that the March 1987 RO decision did not contain clear and
unmistakable error. R. at 1-7. The Board also found that 38 U.S.C. § 1311(a)(2) specifically
prohibited "hypothetical entitlement" as an additional basis for establishing eligibility to a higher
rate of DIC benefits. R. at 6-7.
II. CONTENTIONS ON APPEAL
On appeal, the appellant makes three assignments of error in advancement of her claim for
DIC benefits pursuant to 38 U.S.C. § 1311(a)(2). First, she argues that the Board's determination
that clear and unmistakable error did not exist in the March 1987 RO decision was arbitrary and
3
See Allen v. Principi, 237 F.3d 1368, 1376 (Fed. Cir. 2001); VA Gen. Coun. Prec. 7-99 (June 6, 1999) ("VA
may award [DIC] to a veteran's survivors based on either the veteran's death from a substance-abuse disability
secondarily service connected under 38 C.F.R. § 3.310(a) (entitlement established under 38 U.S.C. § 1310) or based on
a veteran's death while in receipt of or entitled to receive compensation for a substance-abuse disability secondarily
service connected under section 3.310(a) and continuously rated totally disabling for an extended period immediately
preceding death (entitlement established under 38 U.S.C. § 1318.").
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capricious, and she asserts that reversal is appropriate where (1) the Board failed to discuss a
February 1987 Battle Creek, Michigan, VA Medical Center discharge summary of record and (2)
the record before the RO undebatably established that the veteran's PTSD symptoms prevented him
from obtaining or retaining employment, thus entitling him to a higher schedular rating for his
service-connected PTSD. See Appellant's Brief (App. Br.) at 10-22. Secondly, the appellant argues
that she is entitled to DIC benefits based on a "hypothetical entitlement" determination of the
veteran's degree of disability for the eight years preceding his death. See App. Br. at 22-23. Finally,
the appellant argues in the alternative that remand is appropriate because the Board failed to provide
an adequate statement of reasons or bases for its decision. See App. Br. at 24-26.
The Secretary concedes that remand of the appellant's claim for DIC benefits pursuant to
38 U.S.C. § 1311(a)(2) is appropriate to determine whether the veteran was hypothetically entitled
to receive a total disability evaluation for the 8-year period immediately preceding his death. See
Secretary's Brief (Sec'y Br.) at 4-5. However, the Secretary urges the Court to affirm the Board's
determination that clear and unmistakable error did not exist in the March 1987 RO decision. See
Sec'y Br. at 5-13. In this regard, the Secretary argues that the appellant's claim is nothing more than
an allegation that the RO improperly weighed the evidence, which cannot be the basis for asserting
clear and unmistakable error in a final decision. See Sec'y Br. at 7-10. Moreover, the Secretary
argues that the February 1987 discharge summary was not part of "the record" for purposes of
review of the appellant's claim that clear and unmistakable error existed in the March 1987 RO
decision. See Sec'y Br. at 11-12. Finally, the Secretary notes that the March 1987 RO decision was
not the product of clear and unmistakable error because the RO subsequently requested and received
the February 1987 discharge summary and, after reviewing the report, reaffirmed the 50% disability
rating. See Sec'y Br. at 12-13.
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III. ANALYSIS
A. Applicable Law
Section 1311, title 38, U.S. Code provides, in relevant part, that, where a veteran's surviving
dependent has been awarded DIC benefits pursuant to 38 U.S.C. § 1310, a claimant may be entitled
to DIC at an increased rate of payment (enhanced DIC) if the veteran "was in receipt of or was
entitled to receive . . . compensation for a service-connected disability that was rated totally
disabling for a continuous period of at least eight years immediately preceding death." 38 U.S.C.
§ 1311(a)(2). In December 2001, when the appellant first argued that she was entitled to enhanced
DIC under 38 U.S.C. § 1311, the regulation implementing the "entitled to receive" statutory
language of 38 U.S.C. § 1311(a)(2) then provided: "Except with respect to benefits under the
provisions of 38 U.S.C. [§] 1318 . . . issues involved in a survivor's claim for [DIC] benefits will be
decided without regard to any prior disposition of those issues during the veteran's lifetime." 38
C.F.R. § 20.1106 (2001). In Hix v. Gober, 225 F.3d 1377 (Fed. Cir. 2000), the U.S. Court of
Appeals for the Federal Circuit (Federal Circuit) held that "the 'entitled to receive' provision of §
1311(a)(2) requires de novo determination of the veteran's disability, upon the entirety of the record
including any new evidence presented by the surviving spouse." See id. at 1380-81; Hatch v.
Principi, 18 Vet.App. 527, 529-30 (2004) (permitting the adjudication of enhanced DIC claims by
the Board on a hypothetical basis).
After the Federal Circuit issued its decision in Hix, VA amended 38 C.F.R. § 20.1106 to read
as follows: "Except with respect to benefits under the provisions of 38 U.S.C. [§§] 1311(a)(2) [and]
1318 . . . issues involved in a survivor's claim for [DIC] benefits will be decided without regard to
any prior disposition of those issues during the veteran's lifetime." 67 Fed. Reg. 16,309, 16,317
(April 5, 2002) (codified at 38 C.F.R. § 20.1106 (2002)) (emphasis added); see Nat’l Org. of
Veterans’ Advocates, Inc. v. Sec’y of Veterans Affairs, 314 F.3d 1373, 1377 (Fed. Cir. 2003). VA
also interpreted the "entitled to receive" language found in 38 U.S.C. § 1311(a)(2) "to include
situations where, during the veteran's lifetime, the claim could have been reopened based on clear
and unmistakable error, and also where reopening could have occurred based on new evidence
'consisting solely of service department records that existed at the time of a prior VA decision but
were not previously considered by VA.'" See Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of
Veterans Affairs, 476 F.3d 872 (Fed. Cir. 2007) (NOVA III); 38 C.F.R. § 3.22(b) (2006). The
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regulation in effect at the time of the Board decision on appeal is identical to the amended version
of 38 C.F.R. § 20.1106 in effect in 2002. See 38 C.F.R. § 20.1106 (2003).
In August 2005, the Court issued Rodriguez v. Nicholson, 19 Vet.App. 275 (2005), appeal
docketed, No. 06-7023 (Fed. Cir. Nov. 14, 2005). In Rodriguez, the Court addressed whether an
amended version of 38 C.F.R. § 3.22 – the regulation implementing 38 U.S.C. § 1318 – could be
applied to claims pending at VA on January 21, 2000, the date when the amended version of that
regulation went into effect. The Court concluded that the "entitled to receive" language contained
in 38 U.S.C. § 1318(b) established a substantive right in effect during the pendency of Mrs.
Rodriguez's claim and that the Secretary's subsequent attempt to apply the amended version of
§ 3.22, which eliminated the "entitled to receive" theory, constituted an impermissible retroactive
application of the amended regulation. See Rodriguez, 19 Vet.App. at 287. Because the Court
"[wa]s aware of no express authority allowing VA to make its regulations retroactive," the Court
determined that Mrs. Rodriguez was entitled to pursue her enhanced DIC claim based on the
hypothetical entitlement theory as it existed before § 3.22 was amended. See id. at 290.
B. Application of Law to Facts
In its May 2004 decision, the Board denied the appellant's claim for enhanced DIC under
38 U.S.C. § 1311(a)(2), finding that the veteran was not entitled to receive disability compensation
at the time of his death for a service-connected disability that was continuously rated totally
disabling for a period of eight years or more immediately preceding his death because the March
1987 RO decision was not the product of clear and unmistakable error. See R. at 4-7. The Secretary
concedes that remand of the appellant's claim for enhanced DIC under 38 U.S.C. § 1311(a)(2) is
appropriate to determine whether "the veteran was hypothetically entitled to receive a total disability
evaluation for the requisite period of time on the basis of a de novo determination of the veteran's
disability." See Sec'y Br. at 4-5. Because the appellant's claim was pending at the time 38 C.F.R.
§ 20.1106 was amended, the Court agrees with the Secretary that the appellant is entitled to
adjudication of her claim that the veteran was hypothetically entitled to receive a total disability
evaluation under the de novo standard of review. See Rodriguez and Hatch, both supra; see also
Oscar Mayer & Co. v. Evans, 441 U.S. 750, 756 (1979) (concluding that where Congress borrows
language from one statute and incorporates it into a second statute, the language of one act should
ordinarily be interpreted the same way as the other act); Nat’l Org. of Veterans’ Advocates, Inc. v.
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Sec’y of Veterans Affairs, 260 F.3d 1365, 1380-81 (Fed. Cir. 2001) (NOVA I) (noting that the
regulations implementing both 38 U.S.C. §§ 1311(a)(2) and 1318 involved interpretations of the
statutory "entitled to receive" language).
Because the Board applied the wrong standard of review in addressing the appellant's
entitlement to enhanced DIC under 38 U.S.C. § 1311(a)(2), the Court cannot affirm that portion of
the Board's analysis regarding clear and unmistakable error in the March 1987 RO decision, which
is necessarily intertwined with its de novo analysis and decision on the overall issue of entitlement
to enhanced DIC on a hypothetical entitlement basis. See NOVA I, 260 F.3d at 1379 n.13. To affirm
that portion of the Board's decision finding no clear and unmistakable error in the March 1987 RO
decision concerning the veteran's disability rating would potentially act to deprive the appellant of
de novo review of that determination in connection with her claim for enhanced DIC under
38 U.S.C. § 1311(a)(2). This the Court cannot do. With respect to the appellant's other arguments
that she is entitled to enhanced DIC pursuant to 38 U.S.C. § 1311(a)(2) based on the existence of
clear and unmistakable error in the March 1987 RO decision, these arguments have been rendered
moot by the Court's holding. See Hix, 225 F.3d at 1380-81. Nevertheless, the appellant remains free
to raise these particular allegations of error on remand to the Board as it conducts de novo review
to determine whether the veteran was entitled to receive a continuous and total disability rating for
at least eight years immediately preceding his death.
To the extent the appellant may be attempting to assert a freestanding motion for revision
on the basis of clear and unmistakable error (CUE) pursuant to 38 U.S.C. § 5109A, her attempt must
be rejected. The Federal Circuit has held that surviving dependents may not challenge a prior RO
decision where the surviving dependent was not a party to the decision. See Haines v. West,
154 F.3d 1298, 1301 (Fed. Cir. 1998) ("[A]lthough the CUE statute is certainly remedial, it is
nonetheless unavailable to survivors concerning a veteran's disability benefits."); see also NOVA I,
260 F.3d at 1379 n.13 (clarifying, however, that, in certain situations not relevant here, a surviving
spouse can properly assert, in the context of the surviving spouse's own DIC claim, that a previous
final adjudication of the deceased veteran-spouse's claim upon which the success of the DIC claim
depends was the product of clear and unmistakable error); cf. 38 C.F.R. §§ 20.1400, 20.1401(b)
(2006) (precluding claimants from filing a motion for revision on the basis of CUE to those
individuals who were an actual party to the decision being collaterally attacked).
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The Court thus will vacate the Board's May 2004 decision and will remand the matter to the
Board for further adjudication consistent with this decision.
IV. CONCLUSION
Based on the foregoing analysis, the appellant's and the Secretary's briefs, and a review of
the record on appeal, the Secretary's motion for reconsideration is GRANTED; the Court's
September 1, 2006, decision is WITHDRAWN; and this decision is issued in its stead. The Board's
May 12, 2004, decision is VACATED and the matters are REMANDED for readjudication
consistent with this decision.
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