Harvey v. Gober

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

No. 98-1375

JIMMIE HARVEY , JR., APPELLANT ,

V.

HERSHEL W. GOBER,

ACTING SECRETARY OF VETERANS AFFAIRS, APPELLEE.

On Appeal from the Board of Veterans' Appeals

(Argued April 5, 2000 Decided Sep 19, 2000)

Patrick H. Stiehm, of Alexandria, Virginia, for the appellant.

Gary E. O'Connor, with whom Leigh A. Bradley, General Counsel; Ron Garvin, Assistant

General Counsel; and Michael A. Leonard, Deputy Assistant General Counsel, all of Washington,

D.C., were on brief, for the appellee.

Before NEBEKER, Chief Judge, and KRAMER and IVERS, Judges

PER CURIAM: The appellant, Jimmie Harvey, Jr., appeals from a June 15, 1998, Board of

Veterans' Appeals (Board or BVA) decision that denied his application for Service Disabled

Veterans' Insurance (SDVI) on the grounds that Mr. Harvey failed to meet the basic criteria for

entitlement to such benefits. Mr. Harvey filed a brief and a reply brief in support of his claim, and

the Secretary filed a brief urging affirmance of the BVA decision. This appeal is timely, and the

Court has jurisdiction over the case pursuant to 38 U.S.C. § 7252(a). Upon consideration of the

submissions to the Court and the record on appeal, the Court will affirm the Board's decision for

the following reasons.

I. FACTS

Mr. Harvey served on active duty in the U.S. Army from May 1974 to March 1975. Record

(R.) at 45. In October 1974, he suffered an acute schizophrenic episode and was admitted to the

hospital. R. at 36. A medical board determined in January 1975 that he was no longer fit for

military duty, and he was separated from service three months later. R. at 36, 45. Within a few days

of his service separation, Mr. Harvey filed a claim for compensation benefits with VA for his

schizophrenia. R. at 47-48. He underwent a VA medical examination in April 1975 and was

diagnosed with "schizophrenic reaction, acute, undifferentiated type." R. at 53. The examiner noted

in his report that Mr. Harvey was competent and was not in need of psychiatric hospitalization. Id.

In May 1975, the VA regional office (RO) granted Mr. Harvey's claim for service connection and

assigned a 50% disability rating for his schizophrenia. R. at 58. Because Mr. Harvey's service-

connected disorder was rated above 10% disabling, he was eligible to apply for SDVI. See 38

U.S.C. § 241 (1970). His award letter, dated May 27, 1975, reflects that a copy of this decision was

to be sent to the "VA Center" in St. Paul, Minnesota. Id.

Mr. Harvey filed an application for SDVI in August 1995. R. at 126-27. The RO denied his

request via letter in January 1996, stating that he was no longer eligible for these benefits. R. at 205-

06. At the time of Mr. Harvey's award in 1975, applications for SDVI, the RO reported, must have

been submitted within one year from the date VA notifies a veteran that his or her disability is

service connected. R. at 205; see also 38 U.S.C. § 241 (1970). The letter went on to state that RO

records showed that VA sent Mr. Harvey notice of his service connection on May 27, 1975. R. at

205. Consequently, Mr. Harvey's SDVI application was untimely by more than twenty years. Id.

The RO also noted that subsequent changes to the law had extended the eligibility period for SDVI

to two years from the date of service connection notification for new disability ratings dated after

September 1, 1991, but that this did "not apply when second or subsequent ratings are re-ratings of

the same disability." Id.; see also 38 U.S.C. § 7722 (1999).

Mr. Harvey filed a Notice of Disagreement in March 1996. R. at 208-11. His representative

from Disabled American Veterans asserted that Mr. Harvey's service-connected disability "rendered

him unable to make decisions regarding matters such as insurance coverage." R. at 242. The Board

denied the claim in June 1998 (R. at 1-7), concluding that Mr. Harvey "has not demonstrated that

he was incompetent at any time during which he was eligible to apply for [SDVI] . . . . Therefore,

the statutory one-year eligibility period has not been tolled, and the veteran's application for such

benefits is untimely." R. at 5. The Board also stated that "[t]he law does not require the VA to

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provide notice of eligibility for [SDVI], and such lack of notice does not toll the statutory application

period." R. at 4. This appeal follows.

II. ANALYSIS

The Board denied Mr. Harvey's claim for SDVI because it concluded that he had not

established that he was incompetent during his one year of eligibility, and therefore, the filing period

was not tolled. See 38 U.S.C. § 722(a) (1970) (explaining that where the veteran is shown to have

been mentally incompetent during the SDVI filing period, the application for SDVI may be filed

within one year after the appointment of a guardian or within one year after the removal of mental

incompetency) (recodified as 38 U.S.C. § 1922(a) by Pub.L. No. 102-86, § 201(a)(1), 105 Stat. 414,

415 (1991) (extending that period to two years after the appointment of a guardian or the removal

of incompetency)); 38 C.F.R. § 3.353 (1999) (providing the standard for determining incompetency).

Mr. Harvey, however, has not raised this issue before this Court. Thus, the Court deems the issue

abandoned and will not address it further. See Ford v. Gober, 10 Vet.App. 531, 535-36 (1997)

(citing Bucklinger v. Brown, 5 Vet.App. 435, 436 (1993)).

Mr. Harvey contends that the Board's finding that VA was not required to provide him with

notice of SDVI eligibility was contrary to law. Appellant's Brief (Br.) at 6-10. Specifically, he

argues that 38 U.S.C. § 7722(b)-(c) created a legal duty on the part of the Secretary to provide

veterans with notice of SDVI eligibility and that the Secretary did not fulfill his duty in this case.

Thus, he maintains that the statutory filing period for SDVI should be tolled. Id. Mr. Harvey did

not raise these issues before the RO or the Board. Consequently, the Secretary argues that they are

not properly before the Court. Secretary's Br. at 7.

The Court disagrees with the Secretary and holds that it possesses appropriate jurisdiction

to consider those issues pursuant to Maggitt v. West, 202 F.3d 1370, 1377 (Fed. Cir. 2000). In

Maggitt, the Federal Circuit held that the Court, in its discretion, may hear legal arguments presented

for the first time provided that it has proper jurisdiction of the claim. Id. In deciding whether or not

to hear a newly raised legal argument, "[t]he test is whether the interests of the individual weigh

heavily against the institutional interest the doctrine [of exhaustion of administrative remedies] exists

to serve." Id. (citing McCarthy v. Madigan, 503 U.S. 140, 146, 112 S.Ct. 1081, 117 L.Ed.2d 291

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(1992)). "Those institutional interests are, in the main, to protect agency administrative authority

and to promote judicial efficiency." Id.

The doctrine of exhaustion, however, may not be invoked against an individual when: (1)

invocation of the doctrine will result in a prejudicial delay to the individual or doubt exists as to

whether the agency is empowered to grant effective relief, (2) the agency fashioned remedy is

considered inadequate because the agency is "shown to be biased or has otherwise predetermined

the issue before it[,]" or (3) the Congressional purpose or purposes of the statutory scheme under

which the individual is seeking to avoid application of the doctrine would be frustrated to the

detriment of the individual. Id. at 1378.

The Court holds that, to invoke the doctrine of exhaustion of administrative remedies against

Mr. Harvey would require him to present his newly raised legal arguments to the Board, even though

it has already concluded that VA was not required to notify him of his eligibility for SDVI. The

Board's conclusion that VA was not obligated by law to provide notice to Mr. Harvey is indicative

that VA has already predetermined the issue. Therefore, the Court, in its discretion, will not invoke

the doctrine of exhaustion of administrative remedies against Mr Harvey. See id. The invocation

of the doctrine would also result in further delay, which while perhaps not prejudicial to Mr. Harvey,

would be unnecessary and require further unnecessary expenditure of adjudicative resources.

At the time that Mr. Harvey was awarded service connection for his psychiatric disability in

May 1975 (R. at 60), 38 U.S.C. § 722 provided for a one-year period, commencing on the date

service connection is determined, in which a veteran awarded service connection for a condition

rated at least 10% disabling could apply for SDVI benefits. See 38 U.S.C. § 722(a) (1970). Because

Mr. Harvey did not submit his application for SDVI until August 1995 (R. at 126-27), more than 20

years after his award of service connection, that application was considered to have been untimely

under both the former § 722(a) and current § 1922(a). He contends, however, that VA failed to

notify him of his eligibility to apply for SDVI and that, because of such failure, the statutory period

for filing should be equitably tolled. For the following reasons, the Court disagrees.

First, the Court must address what sort of obligation VA had to notify Mr. Harvey of his

eligibility for SDVI. At the time VA granted Mr. Harvey service connection for his schizophrenia,

the pertinent law regarding notice was found in 38 U.S.C. § 241(b)-(c) (1970). Subsequently, the

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law was altered, and now the relevant provisions are incorporated in 38 U.S.C. § 7722 (b)-(c). The

old and new provisions are essentially the same in content. Both provide that VA "shall by letter

advise each veteran at the time of the veteran's discharge or release from active military . . . service

(or as soon as possible after such discharge or release) of all benefits and services under laws

administered by the Department for which the veteran may be eligible." 38 U.S.C. § 7722 (b); see

also 38 U.S.C. § 241(b). Both also provide that VA "shall distribute full information to eligible

veterans . . . regarding all benefits and services to which they may be entitled under laws

administered by the Department . . . ." 38 U.S.C. § 7722 (c); see also 38 U.S.C. § 241(c). For the

purposes of this case, the Court will assume, without deciding, that the Secretary was under a duty

to notify Mr. Harvey of his eligibility for SDVI under both the former § 241 and the current § 7722,

and that if proper notification had not been made, the time for filing an application should be tolled.

See Bailey v. West, 160 F.3d 1360, 1365 (Fed. Cir. 1998) (holding that in appropriate circumstances,

a statutory filing period may be equitably tolled due to conduct of VA). Accordingly, the Court need

not decide whether the old or new provisions would be applicable here. See Karnas v. Derwinski,

1 Vet.App. 308, 313 (1991).

There are specific procedures that VA follows in order to notify veterans of their SDVI

eligibility:

First, a copy of the rating sheet with the award letter is sent to the VA Insurance

Center having insurance jurisdiction over the area in which the Regional Office is

located. See DEPARTMENT OF VETERANS BENEFITS MANUAL M29-1, Part IV, para.

1.02a (Jan. 27, 1976) . . . . Second, when the Insurance Center receives a copy of the

award letter, it is screened to determine whether the veteran is eligible for SDVI. Id.,

para. 1.02e. Third, veterans with eligible rating decisions are sent a form letter (FL

29-5a) and a pamphlet (VA Pamphlet 29-9, Service-Disabled Veterans Insurance

RH-Information and Premium Rates) regarding the requirements for applying for

SDVI. Id., para. 1.03.

Secretary's Br. at 9-10. The Secretary represents that these procedures were in effect at the time VA

granted Mr. Harvey service connection, and that shortly after Mr. Harvey's rating decision was

issued, VA documented the notification procedures in its Manual M29-1. Id. He further represents

that the proper Insurance Center at the time of Mr. Harvey's award of service connection was in St.

Paul, Minnesota. Id. at 2. Additionally, the Secretary's appendices 5-6 show that Form Letter FL

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29-5a and Pamphlet 29-9 were created in July 1972--almost three years before Mr. Harvey's rating

decision was issued. Id. at 10, app. 5-6.

Mr. Harvey seems to contend that these procedures were not properly applied in his case, as

it is his position that he never received notice of his SDVI eligibility. Appellant's Br. at 4-5. He first

asserts that the service connection award letter, which was sent on May 27, 1975, according to VA

records, stated only that a copy of the letter was provided to the VA Insurance Center in St. Paul,

Minnesota. R. at 58. The letter, he argues, did not notify him specifically of his SDVI eligibility.

Id. at 10; Reply Br. at 4. Mr. Harvey, however, has not made any express assertion that he did not

receive by separate mailing Form Letter FL 29-5a or Pamphlet 29-9, which discuss eligibility

requirements for SDVI. Moreover, even assuming that Mr. Harvey's argument could be understood

to be an assertion that he never received these materials, such a contention does not constitute the

"clear evidence" necessary to overcome the presumption that the materials were sent to him in

accordance with the normal course of VA business. See YT v. Brown, 9 Vet.App. 195, 199 (1996)

(holding that a statement of non-receipt does not rebut the presumption of regularity attached to the

normal procedure of mailing Statements of the Case to claimants); Ashley v. Derwinski, 2 Vet.App.

62, 64 (1992) (stating that the Court must apply a "presumption of regularity" to "official acts of

public officers, and in the absence of clear evidence to the contrary, courts presume that they have

properly discharged their official duties" ) (emphasis in original) (quoting United States v. Chemical

Foundation, Inc., 272 U.S. 1, 14-15 (1926)).

Mr. Harvey next asserts that the Insurance Center was never actually notified of his service

connection award by the RO, and consequently, there was no act that would prompt the Insurance

Center to mail the SDVI eligibility notification to him. Appellant's Br. at 10; Reply Br. at 4. He has

nevertheless presented no evidence in support of such a proposition. Because the May 1975 RO

decision sent to Mr. Harvey shows that VA sent a copy of that decision to the "VA Center, St. Paul,

Minnesota," (R. at 58), the Court will assume, pursuant to the presumption of administrative

regularity, that a copy of his award letter was, in fact, sent to and received by the Minnesota location

(See Ashley, 2 Vet.App. at 64; Chemical Foundation, Inc., 272 U.S. at 14-15).

Finally, Mr. Harvey asserts that if the Insurance Center had actually received a copy of his

award letter, then a file containing this letter and a copy of a subsequent notification letter to him

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regarding SDVI eligibility would have been prepared by the Insurance Center in the normal course

of business. Appellant's Br. at 10. That such a file does not now exist, Mr. Harvey argues, signifies

that no such notice was ever sent to him and would thus rebut the presumption of administrative

regularity. Id. The Secretary's representation at oral argument, however, reflects that at the time of

Mr. Harvey's service connection award, part of the regular administrative process of the Insurance

Center was to destroy any notification file that might have existed whenever an application was not

filed within the statutory period for filing. Consequently, the present non-existence of any file, many

years after the time in which such a file should have been destroyed in the normal course of business,

in no way demonstrates administrative irregularity. Because the file's non-existence at this time

cannot be relied upon to defeat the presumption of administrative regularity, Mr. Harvey's argument

must fail.

Even if the Court were to conclude that VA has a statutory duty to notify a veteran of his or

her SDVI eligibility, the Court holds that VA presumably has fulfilled its duty in this case.

Therefore, honoring Mr. Harvey's request to toll the statutory filing period for SDVI benefits is

unwarranted.

III. CONCLUSION

Upon consideration of the foregoing, the Board's June 15, 1998, decision is AFFIRMED.

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