John J. Batcher v. Robert L. Wilkie

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

No. 16-0638

JOHN J. BATCHER, APPELLANT,

V.

ROBERT L. WILKIE,

SECRETARY OF VETERANS AFFAIRS, APPELLEE.

On Appeal from the Board of Veterans' Appeals

(Argued September 14, 2018 April 26, 2019)

John S. Kamarados, of New Kensington, Pennsylvania, for the appellant.

Bryan W. Thompson, with whom Meghan Flanz, Interim General Counsel; 1 Mary Ann

Flynn, Chief Counsel; Selket N. Cottle, Deputy Chief Counsel; Sarah W. Fusina, Senior Appellate

Attorney, were on the brief, all of Washington, D.C., for the appellee.

Before BARTLEY, GREENBERG, and TOTH, Judges.

BARTLEY, Judge, filed the opinion of the Court. GREENBERG, Judge, filed a dissenting

opinion.

BARTLEY, Judge: Veteran John J. Batcher appeals through counsel a December 17, 2015,

Board of Veterans' Appeals (Board) decision granting Roberta M. Batcher entitlement to special

apportionment of the veteran's disability compensation benefits from April 2008 to December

2010, at which time the veteran and Ms. Batcher were married but living separately. Record (R.)

at 3-9.2 This matter, over which the Court has jurisdiction pursuant to 38 U.S.C. §§ 7252(a) and

7266(a), was referred to a panel of the Court, with oral argument,3 to address whether and to what

extent a separation agreement sanctioned by a state court during divorce proceedings affects a

spouse's entitlement to special apportionment of a veteran's VA benefits. We hold that a domestic

1

Meghan Flanz was Interim General Counsel for the appellee when his brief was submitted to the Court, but

James M. Byrne has since been appointed General Counsel.

2

During oral argument, the Court ordered the Secretary to supplement the record of proceedings (ROP) with

various documents. He did so one week later, filing a supplemental record of proceedings (SROP) consisting of two

parts. Citations to the SROP will be designated as such.

3

Oral argument was held at Penn State's Dickinson Law in Carlisle, Pennsylvania, on September 14, 2018.

The Court extends its appreciation to the law school for its hospitality.

relations separation agreement sanctioned by a state court by a judgment of separation plays no

role in VA's determination of entitlement to special apportionment. To the extent that such an

agreement purports to preclude a veteran's spouse from seeking apportionment of a veteran's VA

benefits, the veteran's remedy to make himself or herself whole lies with the state court.

Accordingly, the Court will affirm the December 2015 Board decision.

I. FACTS

Mr. Batcher served on active duty in the U.S. Army from September 1966 to August 1967.

R. at 971. He married Roberta in February 1972, R. at 917, and the couple separated in September

2001, R. at 456.

In December 2004, Mr. Batcher filed a separation action in the Supreme Court of the State

of New York, Suffolk County (hereinafter New York State Court). See R. at 461. In March 2005,

the New York State Court entered a judgment of separation based on a stipulated agreement

between the Batchers, which specified that, inter alia, the veteran would pay Ms. Batcher a $7,200

distributive award; monthly maintenance payments of $300 commencing on January 1, 2005;

$3,000 in arrears maintenance payments; and "certain benefits from the US Army." R. at 463-64.

Regarding the Army benefits, the judgment of separation directed that Mr. Batcher "shall cooperate

with [Ms. Batcher] to effectuate all necessary filings for [her] to receive payments due her under

Federal laws, including survivor benefits or any life insurance benefits, without additional costs to

the [veteran]." R. at 464. The judgment of separation further indicated that "all other issues of

personal properties and marital debts have been resolved." Id.

One year later, in March 2006, Mr. Batcher filed with VA a claim for service connection

for various disabilities. SROP at 896-909. He indicated that he was married but was not living

with his spouse. SROP at 903.

In September 2006, a VA regional office (RO) granted Mr. Batcher service connection for

diabetes mellitus type II and assigned a disability evaluation of 20% effective March 27, 2005, one

year prior to the date of his claim. SROP at 707-08. The RO also granted service connection for

five disabilities secondary to diabetes mellitus type II, as well as special monthly compensation

(SMC) for loss of use of a creative organ, all effective March 27, 2006, the date of his claim.

SROP at 708-12. As a result of that decision, Mr. Batcher received a combined disability

evaluation of 20% beginning on March 27, 2005, and 40% plus SMC at the (k)(1) level beginning

2

on March 27, 2006. SROP at 715. The RO informed him that, as of April 1, 2006, his disability

compensation payment "include[d] an additional amount for [his] spouse" and that he was required

to notify VA "right away if there is any change in [his] marital status." SROP at 699.4

In November 2006, two months after the veteran was awarded VA disability compensation,

the New York State Court held a maintenance hearing. R. at 467-80. At the hearing, the parties

stipulated that Ms. Batcher would accept a lump sum payment of $7,000 from Mr. Batcher in lieu

of the previously agreed-upon monthly maintenance payments. R. at 469 (explaining that, in

consideration of the lump sum payment, "all maintenance and health insurance and obligations

owing from [Mr. Batcher] to [Ms. Batcher] shall cease"), 470 (Ms. Batcher's attorney's

acknowledgment that "the $7,000 amount would resolve the past maintenance, which is due and

owing[,] and future maintenance"). The parties agreed to be bound by this stipulation, R. at 473-

79, and the March 2005 judgment of separation was modified to reflect that Mr. Batcher no longer

owed future maintenance or support obligations to Ms. Batcher. See R. at 472 (parties' agreement

that the March 2005 judgment of separation was modified with respect to maintenance payments

and that the new stipulation "resolves the issues with respect to maintenance"). Mr. Batcher issued

a $7,000 check to Ms. Batcher later that month. R. at 481.

Notwithstanding the November 2006 hearing stipulation, the New York State Court

determined, in December 2006, that Mr. Batcher's disposable military retired pay from the

Uniformed Service Retired Pay Program was marital property and ordered the veteran to pay 50%

of those monthly benefits to Ms. Batcher. R. at 483-86. And, in October 2007, the New York

State Court ordered Mr. Batcher to release to Ms. Batcher 50% of the funds from his 401(k)

retirement account. R. at 499-500.

Ms. Batcher's financial condition subsequently deteriorated and, in April 2008, she filed a

claim with VA for apportionment of Mr. Batcher's VA disability compensation benefits. See R. at

576. In August 2009, the RO denied entitlement to apportionment, including special

apportionment, because, although Ms. Batcher's monthly living expenses exceeded her income,

she "voluntarily renounced any maintenance or support from the veteran[,] including future

claims," in November 2006. R. at 538. Ms. Batcher timely appealed that decision to the Board,

4

Although VA ultimately increased Mr. Batcher's combined disability evaluation, he first met the criteria to

receive additional compensation for a dependent on April 1, 2006. See 38 U.S.C. § 1115 (authorizing additional

compensation for a veteran with dependents "whose disability is rated not less than 30[%]").

3

which, in November 2013, remanded to correct a notice error. R. at 46-52. In the meantime, Ms.

Batcher became homeless, see R. at 9, and the couple divorced in December 2010, R. at 453.

In December 2015, the Board issued the decision currently on appeal. R. at 3-9. The

Board reviewed the evidence of record, including the March 2005 judgment of separation and the

November 2006 hearing transcript, but found that there was "inadequate objective evidence" to

decide Ms. Batcher's entitlement to general apportionment because it was unclear whether the

veteran reasonably discharged his responsibility for her support. R. at 7-8. The Board granted

Ms. Batcher special apportionment of the veteran's disability compensation benefits between April

2008 and December 2010 because it found that she had experienced a hardship during that

period—namely, that her monthly living expenses exceeded her income and that she was homeless

for a time—and that the veteran had not offered any mitigating evidence of his own undue

hardship. R. at 8-9. This appeal followed.5

II. ANALYSIS

Mr. Batcher primarily argues that the Board erred in granting Ms. Batcher special

apportionment of his VA disability compensation because it failed to consider whether she waived

her right to apportionment when she agreed, in a November 2006 state court proceeding, to accept

a lump sum payment from him, purportedly resolving all his past and future maintenance and

support obligations to her. The Secretary disputes this contention and urges the Court to affirm

the Board decision because VA was obligated to grant special apportionment once Ms. Batcher

met the statutory and regulatory criteria for that benefit, regardless of the terms of any potentially

contrary contract between the Batchers. In the Secretary's view, the proper remedy for Mr. Batcher

to pursue is to return to the New York State Court to seek modification of the separation agreement

to reflect the changed circumstances of the grant of apportionment. The Court agrees with the

Secretary.

Relevant to this appeal, a veterans benefits statute provides that "[a]ll or any part of the

[VA] compensation, pension, or emergency officers' retirement pay payable on account of any

veteran may[,] . . . if the veteran is not living with the veteran's spouse, . . . be apportioned as may

be prescribed by the Secretary." 38 U.S.C. § 5307(a)(2). In general, VA may apportion such

5

In November 2016, Mr. Batcher served Ms. Batcher with a copy of the Notice of Appeal in this case. The

Court then ordered that Ms. Batcher had 60 days to file a motion to intervene, but she did not do so.

4

benefits to a competent veteran's spouse "if the veteran is not residing with his or her spouse, . . .

and the veteran is not reasonably discharging his or her responsibility for the spouse's . . . support."

38 C.F.R. § 3.450(a)(1)(ii) (2018). Those benefits may be "specially apportioned" to the spouse

of a veteran, "[w]ithout regard to any other provision regarding apportionment[,] where hardship

is shown to exist." 38 C.F.R. § 3.451 (2018). Special apportionment is awarded "on the basis of

the facts in the individual case as long as it does not cause undue hardship to the other persons in

interest," with certain exceptions not applicable here. Id.; see Hall v. Brown, 5 Vet.App. 294, 295

(1993). "In determining the basis for special apportionment, consideration will be given such

factors as: Amount of [VA] benefits payable; other resources and income of the veteran and those

dependents in whose behalf apportionment is claimed; and special needs of the veteran, his or her

dependents, and the apportionment claimants." 38 C.F.R. § 3.451.

In enacting section 5307, Congress bestowed on certain veterans' dependents the right to

seek apportionment of certain VA benefits paid to the veteran, including disability compensation.

See 38 U.S.C. § 5307(a); Belton v. Principi, 17 Vet.App. 209, 211 (2003) ("Although arising from

a veteran's benefits, an apportionment is an entity legally separate from those benefits. Thus, when

veterans' dependents file on their own behalf for an apportionment, they seek to exercise their right

to an apportionment." (internal quotation marks omitted)). Congress's intent in creating this

federal apportionment right is clear—namely, to ensure that "veterans' disability benefits [] be

used, in part, for the support of veterans' dependents." Rose v. Rose, 481 U.S. 619, 631 (1987);

see also VA Gen. Coun. Prec. 74-90 (July 18, 1990) ("The purpose of apportionment is to

effectuate the responsibility of a VA beneficiary to support the beneficiary's dependent.").

After specifying the general classes of dependents eligible to receive apportionment,

Congress delegated to the Secretary the sole responsibility for defining the criteria for entitlement

to apportionment. See, e.g., 38 U.S.C. § 5307(a)(2) (authorizing apportionment for certain

dependents "as may be prescribed by the Secretary"). Pursuant to that statutory authority, the

Secretary promulgated § 3.450 and § 3.451, which contain the elements for establishing

entitlement to general and special apportionment, respectively. As outlined above, to be entitled

to special apportionment, a claimant must establish that (1) he or she is a qualifying dependent of

the veteran; (2) he or she suffered a hardship during the relevant period; and (3) apportionment

would not cause undue hardship to the other person of interest, usually the veteran. 38 C.F.R.

§ 3.451. Once those criteria are met, entitlement to special apportionment is established and VA

5

must grant that benefit to the claimant. See Holland v. Brown, 9 Vet.App. 324, 329 (1996) (holding

that VA is bound by its own regulations (citing Vitarelli v. Seaton, 359 U.S. 535, 539-40 (1959)));

see also Cushman v. Shinseki, 576 F.3d 1290, 1298 (Fed. Cir. 2009) (explaining that "[a] veteran

is entitled to disability benefits upon a showing that he [or she] meets the eligibility requirements

set forth in the governing statutes and regulations").

That is precisely what happened here. In December 2015, the Board determined that Ms.

Batcher met all the requirements for special apportionment: (1) she was married to but not living

with Mr. Batcher between April 2008 and December 2010,6 R. at 7; (2) she experienced hardship

during that period, as evidenced by the fact that her monthly living expenses exceeded her monthly

income and she was homeless for a time, R. at 8-9; and (3) Mr. Batcher did not proffer any evidence

that apportionment of his disability compensation benefits would cause him undue hardship, R. at

9. With those findings by the Board, entitlement to special apportionment was established and

only the administrative steps of calculation and payment of the apportioned benefits remained. See

Cushman, 576 F.3d at 1298; Jackson v. McDonald, 635 Fed. App'x 858, 861-62 (Fed. Cir. 2015)

(noting that entitlement to a benefit is established when "[a]ll the determinations required for an

award" have been made, even if "clerical computations . . . to produce the bottom-line dollar

amount" of the awarded benefit still remain). Accordingly, the Court discerns no error in the

Board's adjudication of Ms. Batcher's apportionment claim.

Mr. Batcher does not challenge any of the Board's specific findings regarding Ms. Batcher's

entitlement to special apportionment.7 Instead, the veteran limits his arguments to whether Ms.

Batcher waived her right to seek apportionment of his disability compensation by agreeing at the

November 2006 support hearing to accept a lump sum payment in lieu of future maintenance and

6

Although our dissenting colleague notes that section 5307(a)(2) permits apportionment of certain veterans

benefits to a "veteran's spouse" as opposed to an "ex-spouse," post at 8-9, it is undisputed that the Batchers were

married but living separately—i.e., that Ms. Batcher was the veteran's spouse—for the entire period for which the

Board granted special apportionment. See R. at 6 ("[A] divorce decree between the [v]eteran and [Ms. Batcher] was

entered on December 23, 2010. [Ms. Batcher] lost her right to any potential apportionment effective from the date of

their divorce forward. As such, this decision focuses on the period from the date of claim to the date of divorce."

(internal citations omitted)), 9 (finding that Ms. Batcher was "entitled to apportionment of the [v]eteran's compensation

for the period prior to their divorce").

7

He also does not attack the validity of § 3.451, argue that he was not properly informed of the proceeding

or that he did not have the opportunity to present evidence, or otherwise argue that the grant of special apportionment

in this case effected an unconstitutional taking of his property. Consequently, the Court deems any such arguments

abandoned and will not consider them in this decision. See Grivois v. Brown, 6 Vet.App. 136, 138 (1994) (explaining

that the Court has discretion to deem abandoned issues not argued on appeal).

6

support payments from him.8 Whether Ms. Batcher contracted away her right to file a claim for

special apportionment in exchange for adequate consideration from Mr. Batcher—a question that

requires interpretation of a state-court-sanctioned, domestic-relations contract between two private

parties, which was drafted pursuant to state law, see N.Y. FAM. CT. ACT § 425, and to which VA

is not a party—is a matter of contract law best decided by a state court. See United States v.

Windsor, 570 U.S. 744, 766 (2013) (noting that, "subject to [constitutional] guarantees, regulation

of domestic relations is an area that has long been regarded as a virtually exclusive province of the

States" (internal quotation omitted)); Pennoyer v. Neff, 95 U.S. 714, 722 (1877) ("[E]very State

has the power . . . to prescribe the subjects upon which [its inhabitants] may contract, the forms

and solemnities with which their contracts shall be executed, the rights and obligations arising

from them, and the mode in which their validity shall be determined and their obligations

enforced."); Meccico v. Meccico, 76 N.Y.2d 822, 823-24 (N.Y. 1990) ("A separation agreement is

a contract subject to the principles of contract construction and interpretation.").

The Supreme Court's decision in Howell v. Howell, 137 S.Ct. 1400 (2017), is instructive

in this regard. In that case, a state court awarded Mrs. Howell 50% of Mr. Howell's military

retirement pay, a portion of which he later waived to receive VA disability compensation benefits,

thereby decreasing his ex-wife's share. Id. at 1404. The state court ordered Mr. Howell to

reimburse or indemnify Mrs. Howell for the lost share, but the Supreme Court held that such an

order violated the portion of the Uniformed Services Former Spouses' Protection Act that excludes

from the definition of "disposable retirement pay" divisible upon divorce the amount of retirement

pay waived to receive VA disability benefits. Id. at 1404-05; see 10 U.S.C. § 1408(a)(4)(A)(ii);

Mansell v. Mansell, 490 U.S. 581, 594-95 (1989). The Supreme Court explained that the

contingency that Mr. Howell might execute such a waiver "meant that the value of [Mrs. Howell's]

share of military retirement pay was possibly worth less—perhaps less than [she] and others

thought—at the time of the divorce" and that "a family court, when it first determines the value of

a family's assets, remains free to take account of the contingency that some military retirement pay

might be waived, or, . . . take account of reductions in value when it calculates or recalculates the

need for spousal support." Howell, 137 S.Ct. at 1405-06 (citing Rose, 481 U.S. at 630-34 and n.6)

8

The Court notes that the New York State Court's December 2006 and October 2007 orders that Mr. Batcher

pay Ms. Batcher 50% of his military retired pay and the proceeds of his 401(k) retirement account, respectively, appear

to belie that assertion. R. at 483-86, 499-500.

7

The same logic applies here. A federal benefit—Ms. Batcher's right to claim special

apportionment, see Belton, 17 Vet.App. at 211—made Mr. Batcher's spousal obligation potentially

greater than he anticipated in November 2006. Mr. Batcher could have valued that contingency in

the separation agreement and negotiated a lower lump sum payment to account for it. See Howell,

137 S.Ct. at 1406. He apparently did not do so. Nevertheless, the veteran remains free to seek

redress from Ms. Batcher in the New York State Court, either by suing Ms. Batcher for breach of

contract or seeking modification of the separation agreement based on the changed circumstance

of the grant of special apportionment. See id.; see also N.Y. FAM. CT. ACT § 466(a) (permitting

modification of a support or maintenance decree based on changed circumstances). In either event,

his remedy does not lie with VA.

III. CONCLUSION

Upon consideration of the foregoing, the December 17, 2015, Board decision is

AFFIRMED.

GREENBERG J. dissenting: The Secretary is surely too busy to be spending his valuable

time and limited legal resources hounding a Vietnam combat veteran about issues that were settled

in a state court agreement a decade ago. For that and the following reasons, and with the greatest

possible respect for my colleagues, I dissent.

This is a matter of statutory construction. The statute in question is 38 U.S.C. § 5307(a)(2),

which provides, in pertinent part: "if the veteran is not living with the veteran's spouse . . . [benefits

may] be apportioned as prescribed by the secretary." 38 U.S.C. § 5307(a)(2). The language of the

statute is "unambiguous, unequivocal, and unlimited." Conroy v. Aniskoff, 507 U.S. 511, 514

(1993).

Mr. John J. Batcher (appellant) is a decorated Vietnam combat veteran, R. at 971 (DD

Form 214), and he is unemployable because of his service-connected disabilities, R. at 125-30.

The veteran and his ex-spouse, Roberta Batcher (Ms. Batcher), were separated in September 2001.

R. at 456. In November 2006, the parties, each represented by counsel, with full knowledge of the

financial status of the veteran, entered a settlement agreement addressing their financial disputes.

R. at 467-80, 469. Despite this agreement, Ms. Batcher filed a claim with VA requesting

apportionment of the appellant's disability benefits in July 2008. R. at 539. In August 2009, the

8

regional office (RO) denied Ms. Batcher's request for apportionment stating: "we must deny the

claim for an apportionment at this time because Roberta, the spouse, voluntarily renounced any

maintenance or support from the veteran including future claims." R. at 538. Ms. Batcher appealed

and the RO continued to deny apportionment in multiple Statements of the Case. See, e.g., R. at

42-43. On December 23, 2010, the parties were divorced. R. at 453. On December 17, 2015, the

Board issued a decision granting Ms. Batcher an apportionment of the veteran's disability benefits

because Ms. Batcher showed a hardship and the appellant did not. R. at 9. The appellant appealed.

Ms. Batcher should get nothing from VA. If her circumstances have changed it is she, not

the veteran, who must return to state court for a modification. Apparently, the parties agreed in

New York, R. at 467-80, but were divorced in Pennsylvania, R. at 453. The statute concerning

apportionment of VA benefits clearly states that benefits may be apportioned "if the veteran is not

living with the veteran's spouse." 38 U.S.C. § 5307(a)(2) (emphasis added). Congress could have

said ex-spouse, but it did not and "[i]f the intent of Congress is clear, that is the end of the matter."

Chevron, U.S.C., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984). The Congressional

directive to the Secretary is clear – he may apportion benefits for separated spouses. Not ex-

spouses. See 38 U.S.C. § 5307(a)(2). Further, "the whole subject of domestic relations of husband

and wife, parent and child, belongs to the laws of the States and not to the laws of the United

States." Rose v. Rose, 481 U.S. 619, 625 (1987) (citing In re Burrus, 136 U.S. 586, 593-594

(1890)); see also Howell v. Howell, 137 S. Ct. 1400, 1406 (2017) (holding that, while military

retirement pay is divisible as marital property, veterans disability pay is not). The state of New

Jersey recently dealt with the Supreme Court holding in Howell when it decided Fattore v. Fattore,

___ A.3d ___, No. A-3727-16T1, 2019 WL 437946 (Feb. 5 2019). There, the New Jersey

Appellate Division determined that a divorce agreement disposed of the marital property and the

only way to address a change in circumstances was by petitioning the New Jersey courts. Id. The

same is true here. If the ex-spouse in this case had a change in circumstances, the appropriate place

to address those circumstances was with the state court where she entered her binding contract,

New York. R. at 467-80. She may also be free to petition the Commonwealth of Pennsylvania

where the actual decree of divorce was entered. R. at 453. Not with VA.

The correct analogy is to Article 1, Section 10, of the United States Constitution, which

states: "No state shall . . . impair the obligation of Contracts." U.S. Const. art. 1, §10. See Trustees

of Dartmouth College v. Woodward, 17 U.S. 581 (1819). While this provision of the Constitution

9

applies to states, and not to the federal government, the reasoning remains the same. That is, the

ex-spouse should not be permitted to maintain a modification of a properly entered state sanctioned

contract, neither the New York agreement nor the Pennsylvania decree, by the misuse of a VA

order, itself the subject of intense dispute. Compare the RO determinations, R. at 538, with the

Board decision, R. at 9. VA should not be impairing a contract sanctioned by a state court. The

Court should have held that the state court agreements controlled here.

For these reasons, I dissent.

10