Thomas Pekular v. Gordon H. Mansfield

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

NO . 05-2067

THOMAS PEKULAR, APPELLANT ,

V.

GORDON H. MANSFIELD ,

ACTING SECRETARY OF VETERANS AFFAIRS, APPELLEE.

Before GREENE, Chief Judge, and KASOLD, HAGEL, MOORMAN,

LANCE, DAVIS, and SCHOELEN, Judges.

ORDER

On October 31, 2007, the Court issued a panel decision in the above-captioned appeal,

denying the appellant's motion to substitute and vacating the appealed Board of Veterans' Appeals

(Board) decision. See Pekular v. Mansfield, __ Vet.App. __, No. 05-2067 (Oct. 31, 2007). Prior

to the issuance of Pekular, three judges requested full-Court consideration. See Court's Internal

Operating Procedures ¶ V(b)(5).

Upon consideration of the foregoing, and there being no majority in favor of the request for

full-Court consideration, it is

ORDERED that full-Court consideration is DENIED.

DATED: December 20, 2007 PER CURIAM.

KASOLD, Judge, with whom DAVIS, Judge, joins, dissenting: The underlying panel

opinion in Pekular v. Mansfield creates an unnecessary, artificial barrier to substitution that has the

unfortunate effect of forcing surviving spouses and dependents to present issues already decided

contrary to their interest to the agency that rendered that adverse decision, and suffer the delay

inherent in the administrative and judicial appeal processing attendant thereto before the adverse

ruling can be judicially reviewed. See __ Vet.App. __, No. 05-2067 (Oct. 31, 2007). This decision

affects a tremendous number of cases and it presents an issue of exceptional importance warranting

full-Court consideration. See U.S. VET. APP. R. 35(c) (establishing criteria for full-Court

consideration). Accordingly, I respectfully dissent from the Court's denial of such consideration.

Rule 43 of the Court's Rules of Practice and Procedure (Rules) authorizes parties to be

substituted, as permitted by law. Such a permitted instance is when the movant has an interest in

the pending matter. Cf. FED . R. CIV . P. 17, 25 (permitting substitution of real parties in interest upon

death of a party). It is without question that a veteran's surviving spouse1 has an interest in the

outcome of his or her deceased spouse's appeal with regard to a claim for disability compensation.

This is so because the spouse is an accrued-benefits beneficiary, and the spouse's claim is directly

derivative of the deceased veteran's claim. See Padgett v. Nicholson, 473 F.3d 1364, 1369 (Fed. Cir.

2007) (Padgett III); Zevalkink v. Brown, 102 F.3d 1236, 1242 (Fed. Cir. 1996). Thus, any reversal

of a Board decision denying benefits necessarily establishes the right to the accrued benefits.

Many years passed after the Court's holding in Landicho v. Brown, 7 Vet.App. 42 (1994),

and the decision of the U.S. Court of Appeals for Federal Circuit (Federal Circuit) in Zevalkink,

before the Court recognized that an accrued-benefits beneficiary could be substituted for a deceased

veteran in a case involving a disability compensation claim. Succinctly stated, the Court held in

Landicho that (1) a compensation claim did not survive the veteran, (2) when a veteran dies while

his claim is on appeal, the Board decision should be vacated to avoid any preclusive effect on an

accrued-benefits claim, and (3) substitution could not be permitted. See Landicho, 7 Vet.App. at

46-49. Although Zevalkink only approved of this approach, but did not mandate it, see Zevalkink,

102 F.3d at 1244 (noting the possibility that Court could remand the matter for certification of a

party seeking substitution as an accrued-benefits beneficiary under statute), the Court nevertheless

refused to consider substitution for an accrued-benefits beneficiary until a panel did so very recently,

see Nolan v. Nicholson, 20 Vet.App. 340, 345 (2006).

It is thus particularly ironic that now, when substitution is just again being recognized as a

viable option, that a panel of the Court establishes an unnecessarily restrictive barrier to substitution,

i.e., that the Court will not permit substitution unless prior to death the deceased veteran completed

all briefing or expressly waived complete briefing. Although the panel ostensibly relies on Padgett

III for establishing this barrier, nothing in that case requires such action. Rather, Padgett III

reiterates the fact that an accrued-benefits claim is derivative of the veteran's claim and establishes

very clearly that the accrued-benefits beneficiary has an interest and therefore has standing in the

veteran's case on appeal. See Padgett III, 473 F.3d at 1369-71. The Federal Circuit also explicitly

noted the futility of an accrued-benefits beneficiary seeking a changed ruling from the Secretary,

thus only delaying judicial review of the matter if substitution is denied and the matter is remanded.

See id. at 1370.

Although there is discussion in Padgett III regarding the fact that the underlying appeal in

that case had been submitted for decision, that was wholly in the context of whether issuance of a

decision after the death of a party appropriately can be done nunc pro tunc. See id. at 1367-69

(citing Harris v. Comm'r, 340 U.S. 106, 113 (1950); McDonald v. Maxwell, 274 U.S. 91, 99 (1927);

Quon Quon Poy v. Johnson, 273 U.S. 352, 359 (1927); Bell v. Bell, 181 U.S. 175 179 (1901); and

Mitchell v. Overman, 103 U.S. 62, 64-66 (1880)). Submission of the case was not a prerequisite for

substitution. Moreover, when a party is substituted, that party assumes the case at the point where

the original party left it – even when briefing is incomplete or arguments have yet to be made; that

1

Congress has expressly provided that a veteran's surviving spouse, children, and dependent

parents are potential accrued-benefits beneficiaries. See 38 U.S.C. § 5121(a)(2).

2

is, the case stands as if the substituted party had been the original party. See 59 AM . JUR . 2D

PARTIES § 359 (2002); see also FED . R. CIV . P. 25(a)(1) (establishing as the only criterion for

substitution that a proper party in interest must seek substitution within 90 days after the death of

the original party is suggested on the record).

Further, the panel establishes this artificial barrier in conflict with our Rules, which permit

substitution as authorized by law. See U.S. VET. APP. R. 43. Although it is true that a panel decision

is precedential, it does not follow that our Rules should be changed by a panel. Rather, changes to

our Rules should go through the established rule-promulgating procedures that generally include the

participation of our Rules Advisory Committee and other interested parties. See 38 U.S.C.

§ 7264(a); 28 U.S.C. § 2071(b); U.S. VET. APP. R. 40(a). Indeed, the Court, the bar, and the parties

would be better served by following our normal practice.

In the end, it is the accrued-benefits beneficiary who has the interest in the matter,2 and

substituting such a person should be within the discretion of the Court so long as it does not alter

the substantive grounds of the litigation. See 59 AM . JUR . 2D PARTIES §§ 322 (2002) (substitution

granted liberally except when the effect is to state a new cause of action or otherwise prejudicial to

the other party), 328 (substitution is within the discretion of the court). When requested, substitution

should be granted liberally on a case by case basis considering the totality of the circumstances,

including the interests of justice, timely resolution of the matter, and judicial economy. Substitution

should not be denied because of an arbitrary barrier.

Should en banc review of this issue be sought again, see U.S. VET. APP. R. 35(c) (authorizing

a motion for en banc review), or changes suggested to our Rules, see U.S. VET. APP. R. 40 (Rules

Advisory Committee may recommend changes), to overturn the unfortunate effect of the underlying

panel decision, I would urge my colleagues to grant the review or change our Rules so that

substitution may again be permitted when a third party has interest and when such substitution is

otherwise warranted in a particular case.

DAVIS, Judge, with whom KASOLD, Judge, joins, dissenting: I respectfully dissent from

the Court's denial of en banc consideration, because this case presents an issue of exceptional

importance. See U.S. VET. APP. R. 35(c). I write separately to emphasize what I believe to be a

misapplication of law in Pekular v. Mansfield, __ Vet.App. __, No. 05-2067 (Oct. 31, 2007).

I compliment the Pekular panel for its analysis of the decision of the U.S. Court of Appeals

for the Federal Circuit (Federal Circuit) in Padgett v. Nicholson, 473 F.3d 1364 (Fed. Cir. 2007)

[hereinafter Padgett III], to the extent that Pekular gave meaning to the phrase "submitted for

decision." Beyond that, however, the opinion incorrectly blends the Federal Circuit's criteria for

deciding when it is appropriate to grant nunc pro tunc relief with the Federal Circuit's test for

2

See also Veterans Quality of Life Study Act of 2007, H.R. 4084, 110th Cong. § 3 (1st Sess.

2007) (legislation to substitute a potential accrued-benefits beneficiary upon the death of a claimant

pending final adjudication on a claim for any VA benefit).

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deciding when it is appropriate to grant substitution. Specifically, Pekular characterizes the nunc

pro tunc "prerequisites" as follows:

(1) The veteran must have died after his case was submitted for decision;

(2) substitution must be appropriate, that is, the person seeking substitution must

have standing under both Article III of the U.S. Constitution and must be adversely

affected by the underlying Board decision under 38 U.S.C. § 7266(a); and (3) the

considerations of justice and fairness outlined by the Supreme Court in Mitchell [v.

Overman, 103 U.S. 62 (1880)] must be satisfied.

Pekular, __ Vet.App. at __, slip op. at 7 (citations omitted). Drawing from the criteria for nunc pro

tunc relief, Pekular adds that substitution is appropriate only after (1) "filing of the appellant's reply

brief, (2) the expiration of the time to file a reply brief, or (3) the filing of a waiver of the right to

file a reply brief." Id. at 13. The panel, apparently in an attempt to draw a bright line rule to ensure

lockstep results in a matter of judicial discretion, limits the ability of the Judges of this Court to

substitute parties to those cases where the briefing schedule has been completed or where the

completion has been waived. This holding not only unreasonably restricts the Court's own broad

rule that authorizes parties to be substituted simply "to the extent" permitted by law (see U.S. VET.

APP. R. 43), but it is also contrary to the Padgett III decision.

At the outset, Padget III identified the following two questions of law that it would resolve:

First, where a veteran dies after his case is submitted for decision, but before the

opinion issues, does the Veterans Court have authority to issue the judgment nunc

pro tunc as of the time of his death? Second, and intertwined with the first, is

whether, under these circumstances, the surviving spouse, as accrued-benefits

claimant, may be substituted on her husband's appeal[.]

Padgett III, 473 at 1367. The Court articulated considerations for each question, and answered both

in the affirmative.

A. Criteria for Nunc Pro Tunc Relief

In Padgett III, the Federal Circuit first acknowledged that Article I courts have the authority

to provide nunc pro tunc relief. Id. at 1368. The criteria for granting such relief is largely

discretionary and "'should be granted or refused, as justice may require, in view of the circumstances

of the particular case.'" Id. (quoting Mitchell, 103 U.S. at 65). The Federal Circuit proceeded to

address whether nunc pro tunc relief was appropriate in that case, centering its analysis on whether

entering Mr. Padgett's judgment nunc pro tunc would be inconsistent with the applicable benefits

statutes and the statutes governing standing and jurisdiction in this Court. Id. at 1369. The Federal

Circuit drew a distinction between Zevalkink v. Brown, 102 F.3d 1236 (Fed. Cir. 1996), where the

veteran died prior to the submission of his case, and Padgett, where the veteran died after the case

was submitted to the Court for a decision. In Mr. Padgett's case, the Federal Circuit concluded: "In

our view, granting nunc pro tunc relief here is consistent with, if not compelled by, the statutory

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scheme for awarding benefits to veterans and their survivors." Padgett III, 473 F.3d at 1368.

Contrary to Pekular, the Federal Circuit went no further in establishing "prerequisites" for nunc pro

tunc relief.

B. Two-part Inquiry for Substitution

The Federal Circuit next addressed whether Mrs. Padgett could be substituted for the veteran

in the appeal. The Federal Circuit held that "substitution in veterans cases is a two-part inquiry."

Padgett III, 473 F.3d at 1370. First, this Court requires a case or controversy, because we do not

decide hypothetical claims. Id. Second, a party seeking substitution must be "adversely affected"

by a decision of the Board. The Federal Circuit then concluded that with respect to the case-or-

controversy requirement, Mrs. Padgett met the requirement because the issues decided in her

husband's appeal have continued relevance to and a potential preclusive effect on her accrued-

benefits claim. Id. Regarding adverse effects, the Federal Circuit concluded that, but for the nunc

pro tunc relief, the Board's decision would adversely affect her claim–it is that injury that gave her

standing.3 Id.

The Federal Circuit's test for substitution is clear and unambiguous: (1) A case or

controversy must exist; and (2) the person seeking substitution must be adversely affected by the

decision of the Board. Nothing in the Federal Circuit's analysis tied this Court's ability to substitute

a party to a briefing schedule or waiver thereof. By doing so, the Pekular panel needlessly placed

this Court in a substitution straightjacket, limiting the ability of Judges to apply the Padgett III test

and determine on a case-by-case basis the appropriateness of substitution. For these reasons I

dissent.

1

At the conclusion of its substitution discussion, the Federal Circuit added that "[t]he paramount considerations

in this inquiry are justice and fairness to the parties." Id. at 1370 (citing Mitchell, 103 U.S. at 64-66, and Weil v.

Markowitz, 898 F.2d 198, 200 (D.C. Cir. 1990)). It is unclear whether the Federal Circuit intended this to be an

overarching consideration for both nunc pro tunc relief and substitution, however, both of the cases cited apply to nunc

pro tunc relief and make no mention of substitution.

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