George D. MURPHY, Appellant, v. Eric K. SHINSEKI, Secretary of Veterans Affairs, Appellee.
No. 12-1700.
United States Court of Appeals for Veterans Claims.
April 4, 2014.
26 Vet. App. 510
Will A. Gunn, General Counsel; David L. Quinn, Acting Assistant General Counsel; Nisha C. Hall, Deputy Assistant General Counsel; and William L. Puchnick, Appellate Attorney, all of Washington, D.C., were on the brief for the appellee.
Before MOORMAN, LANCE, and BARTLEY, Judges.
BARTLEY, Judge:
Veteran George D. Murphy appeals through counsel a February 27, 2012, Board of Veterans’ Appeals (Board) decision denying entitlement to an increased disability evaluation in excess of 10% for service-connected sinusitis. Record (R.) at 3-24.1 This appeal is timely and the Court has jurisdiction to review the Board‘s deci-
I. FACTS
Mr. Murphy served on active duty in the U.S. Air Force from August 1953 to May 1984. R. at 95, 949, 1059, 2104, 2153, 2176, 2272. In July 1984, a VA regional office (RO) granted service connection for chronic sinusitis and assigned a 10% evaluation effective June 1, 1984, the date of his original claim. R. at 2111-12. He sought an increased evaluation for that condition in December 2000 (R. at 2097-99), which was denied by the RO in September 2001 (R. at 1817-26). The veteran did not appeal that decision and it became final.
In June 2003, Mr. Murphy filed another claim for an increased evaluation for sinusitis (R. at 1812-16), which was denied by the RO in May 2004 (R. at 1232-42). The veteran filed a timely Notice of Disagree-ment (NOD) as to that decision (R. at 1216-18) and subsequently perfected his appeal to the Board (R. at 965-71). In February 2010, the Board remanded his claim to provide a current VA medical examination to assess his sinusitis. R. at 422-49.
Mr. Murphy underwent that examination in December 2010 and reported a history of incapacitating episodes of sinusitis requiring four to six weeks of antibiotic treatment once per year and nonincapaci-
On June 16, 2011, the VA Appeals Management Center (AMC) sent Mr. Murphy a June 10, 2011, Supplemental Statement of the Case (SSOC) increasing his sinusitis evaluation to 30%, effective June 20, 2003, the date of his claim for increase. R. at 87-92. The AMC cited the findings from the December 2010 VA examination and, “resolving reasonable doubt in [the veteran‘s] favor,” determined that his “disability picture more nearly approximates the criteria for a 30[%] evaluation based on recurrent episodes, chronic pain, purulent drainage[,] and impact on daily activities.” R. at 91. The AMC also informed Mr. Murphy that, “[g]iven the favorable resolution of this [claim] and [the] other issues on appeal,” he was now entitled to a 100% combined disability evaluation. R. at 92. On July 1, 2011, the AMC sent the veteran a copy of a June 10, 2011, rating decision, effectuating the increased evaluation for sinusitis. R. at 63-80. The July 1, 2011, cover letter mailed with that decision notified Mr. Murphy of his total VA monthly benefit amount, effective from July 1, 2003 (R. at 63-64) and attached VA Form 21-8764, Disability Compensation Award Attachment Important Information (R. at 66), which notifies veterans that they will begin to receive payment within 15 days—i.e., in Mr. Murphy‘s case, by July 16, 2011.
The appeal was subsequently returned to the Board because it was not a complete grant of the benefits the veteran was seeking, and, in February 2012, the Board issued the decision currently on appeal. R. at 3-24. Despite the AMC awarding Mr. Murphy a 30% evaluation for sinusitis in June 2011, the Board characterized the issue on appeal as “[e]ntitlement to an increase in a 10[%] rating for sinusitis.” R. at 3. The Board reviewed the medical and lay evidence of record and determined that the veteran‘s sinusitis had not been treated with antibiotics for a prolonged period of four to six weeks, nor had it been manifested by more than six nonincapacitating episodes per year characterized by headaches, pain, and purulent discharge or crusting. R. at 14-18 (citing
II. ANALYSIS
Mr. Murphy argues that the Board decision should be reversed “so that the RO‘s rating decision stands.” Appellant‘s Brief (Br.) at 2. In the alternative, he argues that remand is in order because the Board failed to provide adequate reasons or bases in that it “clearly did not review [the]
A. Mischaracterization of the Issue on Appeal
Here, the Board remanded the veteran‘s claim in February 2010 for further development and readjudication by the RO. R. at 422-49. On remand, the AMC in June 2011 issued a rating decision awarding Mr. Murphy a 30% evaluation for sinusitis for the entire claim period (see R. at 63-80), payment of which began in July 2011 (R. at 66). The AMC also issued an SSOC in which it explained the grant of benefits and why he was not entitled to a 50% evaluation for sinusitis. R. at 87-92. Because the veteran‘s claim for an increased evaluation was the subject of a previous February 2010 Board remand, the grant of a 30% evaluation was not a complete grant of benefits, and Mr. Murphy did not thereafter withdraw the appeal (see R. at 92), the AMC returned the case to the Board. See
The Board‘s mischaracterization of the issue on appeal tainted its entire decision. Although the Board appears to have acknowledged that a decision was issued on remand, R. at 5, the Board overlooked the June 2011 award of a 30% evaluation and addressed the veteran‘s appeal as if his sinusitis were evaluated as 10% disabling. The Board‘s failure to correctly reflect the June 2011 adjudication and award by the AMC resulted in the Board considering an issue outside the scope of the appeal, applying the wrong law, and engaging in the wrong analysis.
Once the AMC granted this 30-year Air Force veteran a 30% evaluation for sinusitis, the only issue before the Board was his entitlement to a disability evaluation in excess of 30% for sinusitis. Therefore, it was outside the scope of the veteran‘s direct appeal for the Board to revisit the issue of entitlement to a disability evaluation less than 30%. See AB v. Brown, 6 Vet.App. 35, 39-40 (1993) (an RO decision awarding an increase from 10% to 30% in a “veteran‘s ... rating did not fully resolve the administrative claim on appeal to the
To hold otherwise would leave the door open for a possible “chilling effect” in the administrative appeal process, whereby veterans might be afraid to seek higher disability evaluations on appeal, for fear of having already awarded benefits reduced by the Board during the appellate process. See, e.g.,
Moreover, statutes, regulations, and caselaw clearly acknowledge that the appellant generally controls the scope of appellate review by “select[ing] the issues upon which he [or she] seeks to appeal to the Board.” Smith v. Brown, 35 F.3d 1516, 1520 (Fed. Cir. 1994), superceded on other grounds by statute as stated in Samish Indian Nation v. United States, 419 F.3d 1355 (Fed. Cir. 2005). Appellate re-
view is “initiated” by a claimant or a claimant‘s representative filing an NOD and, after VA issues a Statement of the Case, that review is formalized by a claimant or a claimant‘s representative filing a Substantive Appeal.
B. Payment of Increased Disability Compensation
The Secretary attempts to excuse the Board‘s mischaracterization of the issue on appeal by citing McBurney and Anderson for the propositions that the Board is not bound by favorable findings made below and that the Board‘s jurisdictional statute does not limit its ability to review factual findings. See Secretary‘s Br. at 6 (citing McBurney, 23 Vet.App. at 139 (“[T]he Board, as the final trier of fact, is not constrained by favorable determinations below.“); Anderson, 22 Vet.App. at 428 (noting that
An award of increased disability compensation, especially one of which the veteran has been notified and begun to receive payment, differs from a favorable finding of fact or law. Here, the record shows that Mr. Murphy began to receive increased disability compensation payments within 15 days of the July 1, 2011,
In other words, veterans like Mr. Murphy, who have been awarded increased compensation and have begun to receive payment pursuant to that award by the AOJ, have a reliance interest in that compensation that does not arise when the AOJ makes a mere favorable finding of fact or law that does not result in an award of benefits. Cf. Singleton v. Shinseki, 23 Vet.App. 376, 380 (2010) (contrasting veterans who are receiving disability compensation and have “adjusted to having that income for ongoing expenses” with veterans who are not receiving such compensation and for whom “such reliance is not present“), aff‘d, 659 F.3d 1332 (Fed. Cir. 2011). Therefore, the Secretary‘s reliance on McBurney and Anderson—cases involving favorable findings by the RO that did not, in and of themselves, result in an award of benefits—is misplaced. See McBurney, 23 Vet.App. at 139-40 (Board not bound by stipulation, agreed to by the RO, that the veteran was “forcibly detained” by a hostile force and thus considered a former prisoner of war under
Unlike McBurney and Anderson, the case at hand presents a reduction in disability evaluation by the Board and, consequently, a reduction in compensation received by the veteran. See Dofflemyer v. Derwinski, 2 Vet.App. 277, 279-82 (1992) (holding that the Board erred in mischaracterizing the issue as entitlement to an increased evaluation rather than whether reduction was proper, thereby failing to observe the law applicable to reductions); Peyton v. Derwinski, 1 Vet.App. 282, 286-87 (1991) (same). In such a situation—i.e., “[w]here [a] reduction in evaluation of a service connected disability ... is considered warranted and the lower evaluation would result in a reduction or discontinuance of compensation payments currently being made“—notice and an opportunity to present additional evidence must be pro-
The critical facts in this case are that, shortly after the award of the 30% evaluation, the veteran began to receive increased disability compensation from that award, and he was in receipt of that compensation when the Board issued its decision that effectively reduced the assigned evaluation from 30% to 10%. See R. at 66. Because Mr. Murphy was receiving compensation at the 30% level at the time the Board assigned the lower 10% evaluation, the procedural requirements for reducing previously assigned disability evaluations were applicable, including the notice provisions of
The situation here differs fundamentally from staged-rating cases in which this Court has held that
Unlike in O‘Connell, the Board decision here had the effect of reducing Mr. Murphy‘s disability evaluation to 10%, a level below that which was in effect when his appeal was returned to the Board following the June 2011 AMC decision. Because Mr. Murphy had begun receiving payment of the increased disability compensation awarded by the AMC at the time that the Board issued its decision, he had a reliance interest in the continued payment of disability compensation at that level. See Reizenstein, Singleton, and O‘Connell, all supra. Therefore, the Board‘s failure to abide by the procedural requirements of
C. Substantive Regulatory Requirements for Reduction
In addition to the Board‘s errors in mischaracterizing the issue on appeal and
III. CONCLUSION
Because the Board mischaracterized the issue on appeal, addressed an issue outside the scope of Mr. Murphy‘s appeal, and improperly reduced his disability evaluation for sinusitis without affording him one review on appeal and without complying with the procedural and substantive regulatory requirements for reduction, the Board‘s decision is void ab initio. See Kitchens v. Brown, 7 Vet.App. 320, 325 (1995) (“Where ... the Court finds that the [Board] has reduced a veteran‘s rating without observing applicable laws and regulation, such a rating is void ab initio and the Court will set it as aside as not in accordance with law.“). Therefore, the Court will reverse the Board decision, order that the 30% evaluation be reinstated, and order that the Board consider the issue that was the subject of the veteran‘s appeal, entitlement to an evaluation in excess of 30% for sinusitis. See Murray v. Shinseki, 24 Vet.App. 420, 428 (2011); Schafrath v. Derwinski, 1 Vet.App. 589, 595 (1991).
Upon consideration of the foregoing, the Board‘s February 27, 2012, decision denying a disability evaluation in excess of 10% for service-connected sinusitis is REVERSED, and that matter is REMANDED for reinstatement of the 30% evaluation for that condition and consideration of entitlement to an evaluation in excess of 30%.
Ouida WISE, Appellant, v. Eric K. SHINSEKI, Secretary of Veterans Affairs, Appellee.
No. 12-2764.
United States Court of Appeals for Veterans Claims.
April 16, 2014.