**UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS**

**[No]{.smallcaps}. 00-0418**

**[Dennis A. Svehla, Appellant]{.smallcaps},**

**[v.]{.smallcaps}**

**[Anthony J. Principi,]{.smallcaps}**

**[Secretary of Veterans Affairs, Appellee]{.smallcaps}****.**

**On Appeal from the Board of Veterans\' Appeals**

**(Argued November 14, 2002 Decided June 25, 2003 )**

***Daniel G. Krasnegor*, with whom *Christopher A. Glaser* was on the
brief, both of Washington, D.C., for the appellant.**

***Kenneth A. Walsh*, with whom *Tim S. McClain*, General Counsel; *R.
Randall Campbell*, Assistant General Counsel; and *Brian B. Rippel*,
Deputy Assistant General Counsel, all of Washington, D.C., were on the
brief for the appellee.**

**Before FARLEY, STEINBERG, and GREENE, *Judges*.**

**GREENE, *Judge*, filed the opinion of the Court. STEINBERG, *Judge*,
filed a concurring opinion.**

**GREENE, *Judge*: The veteran, Dennis A. Svehla, appeals, through
counsel, a December 30, 1999, decision of the Board of Veterans\'
Appeals (Board) that denied an effective date earlier than November 1,
1995, for the payment of his Department of Veterans Affairs (VA)
disability compensation benefits. Record (R.) at 8. Mr. Svehla asserts
that the Board erred by concluding that he had been notified, in 1968,
that payment of his VA compensation would not commence until he elected
compensation or waived his military retired pay. Appellant\'s (App.)
Supplemental (Suppl.) Brief (Br.) at 4, 10-11. He argues that the Court
should reverse the Board decision and direct that the proper effective
date for the payment of his VA compensation benefits was the first day
that he no longer received Temporary Disability Retirement List (TDRL)
benefits. Alternatively, he argues that the Board decision should be
vacated and the matter remanded on the basis that the Board\'s
discussion lacks an adequate statement of reasons or bases. *Id.* at 4.
This appeal is timely, and the Court has jurisdiction under 38 U.S.C. §§
7252(a) and 7266. The Court agrees that there was error and will
therefore reverse and remand.**

**I. FACTS**

**The facts are not in dispute. Mr. Svehla served on active duty in the
U.S. Marine Corps from December 1964 to July 1967. R. at 3, 28. In
December 1966, after a criminal proceeding in the United States District
Court for the District of Columbia, he was found not guilty by reason of
insanity, but also was ordered admitted to St. Elizabeths Hospital in
Washington, D.C., for psychiatric observation and treatment. R. at 22.
On August 1, 1967, the U.S. Marine Corps placed him on the TDRL and
awarded him a disability rating of 30%; this rating was increased to
100% on December 28, 1967. R. at 34. (Although the exact date on when
Mr. Svehla\'s TDRL status ended is unclear from the record, it appears
that it ended in 1969. *See* R. at 117.)**

**In October 1967, Sol Rosen, Esq., on behalf of Mr. Svehla, filed with
a VA regional office (RO) an application for compensation for service
connection for \"Mental Illness -- Schizophrenic Reaction, Chronic
Undifferentiated Type.\" R. at 13. Accompanying the application was a
cover letter, written on Mr. Rosen\'s professional letterhead, which
stated as follows: \"I am enclosing herewith the claim for disability
benefits from the V.A. for my client Dennis Svehla, who is incarcerated
in St. Elizabeth\'s \[sic\] Hospital. I would appreciate it greatly if
you would advise me of the future processing of his claim for
benefits.\" *Id.* An RO letter, dated later in October 1967, to Mr.
Svehla, was addressed \"c/o Sol Z. Rosen.\" R. at 20.**

**In July 1968, the RO granted Mr. Svehla service connection for, inter
alia, schizophrenic reaction, chronic, undifferentiated type, rated as
100% disabling. R. at 28-29. On July 26, 1968, the RO issued, on a form
entitled \"Disallowance Disability or Death Claim\" (VA Form 21-523), a
statement that Mr. Svehla\'s benefits were being \"disallowed,\" noting
the following reason: \"Veteran on Active Duty or in Receipt of Retired
Pay.\" Suppl. R. at 55. The form also contained a mark next to a box
designated \"Notice to a Retired Veteran of His Right of Election to
Receive Disability Compensation.\" *Id.* There is nothing in the record
to indicate that this form was sent to either Mr. Svehla or Mr. Rosen.
However, on August 1, 1968, a letter from the RO was sent to Mr. Svehla,
addressed \"C/O St. Elizabeths Hospital\", stating as follows: \"Your
claim for compensation has been carefully considered on the basis of all
the evidence, including reports received from the Service Department.
The evidence establishes that \[y\]our nervous disorder, incurred in
peacetime and Vietnam era\[,\] is 100% disabling from 8-1-67.\" R. at
32. The letter indicated that enclosed was a copy of VA Form 21-651
(Election of Compensation in Lieu of Retired Pay or Waiver of Retired
Pay to Secure Compensation from Department of Veterans Affairs), but the
record does not include a copy of that form. *See* R. at 32. Neither
this letter nor any other letter in the Record on Appeal (ROA) mentions
or refers to the July 26, 1968, \"disallowance\" form (that is, the VA
Form 21-523). *See* R. at 20-40; Suppl. R. at 1-15. However, after
receiving a medical report from Dr. Elizabeth R. Strawinsky, a physician
at St. Elizabeths Hospital (R. at 37), the RO sent Mr. Svehla a
September 10, 1968, letter, stating as follows:**

> **The evidence does not warrant any change in the previous
> determination. The above cited report shows continued improvement in
> your service-connected condition. Your evaluation as 100% disabl\[ed\]
> is continued. If you wish to receive compensation, you should complete
> Section I of the \[VA Form\] 21-651 sent to you on August 1, 1968\[,\]
> and return it to this office.**

**R. at 40. Nothing in the ROA reveals that any further action was taken
on this matter between 1968 and 1995.**

**In October 1995, Mr. Svehla contacted VA and asked about the status of
his benefits. R. at 42. After receiving a reply from the RO, he filed,
on December 26, 1995, a VA Form 21-651. R. at 54. In February 1996, the
RO informed Mr. Svehla that VA would begin paying his disability
compensation benefits effective February 1, 1996. R. at 57. In
April 1996, Mr. Svehla wrote to the RO protesting the nonpayment of
compensation from November 1995 to February 1996, and inquiring about
his entitlement to these benefits since the date of his original
application for compensation in 1967. R. at 62. The RO issued a decision
in which it concluded that November 1, 1995, was the appropriate
effective date for his benefits because that was the date that VA
considered his \"disallowed\" claim was reopened. R. at 65.**

**In June 1997, Mr. Svehla filed a Notice of Disagreement (NOD) as to
the RO decision. R. at 86. He asserted: \"I feel that since I was rated
100% at the original time, for psychiatric reason, I did not understand.
I never received your original letters sent to me at St. Elizabeth\'s
\[sic\] Hospital, in Washington, D.C., which was a psychiatric
facility.\" *Id.* At a later hearing before the Board, Mr. Svehla
testified under oath that, until after February 1996, he had been
unaware of the date of his award of service connection for his mental
disability, and again complained that he had never received copies of
the August and September 1968 RO decision letters. R. at 116-17.**

**On December 30, 1999, the Board denied an effective date earlier than
November 1, 1995. R. at 3. Relying on *Jones (Raymond) v. West*, 12
Vet.App. 98, 101-02 (1998), the Board found that the presumption of
regularity attached to the RO\'s mailing of the August and September
1968 decision letters, and that that presumption was not rebutted
although the letters to Mr. Svehla contained an incomplete address (the
full and correct address had been included in Mr. Svehla\'s application
for benefits). R. at 4-5. Concerning Mr. Svehla\'s other arguments, the
Board determined:**

> **According to testimony presented at hearing, the veteran has not
> received retirement pay since 1968. Therefore, at the time he filed
> his October 1995 claim, he was not required to submit an election to
> receive VA compensation and the exception noted in 38 U.S.C.\[\] §
> 3.400(j) was inapplicable.**

**. . . .**

> **. . . Inasmuch as the evidence establishes that the veteran did not
> submit a claim prior to October 1, 1995, or an election to receive VA
> compensation between August 1968 and January 1996, the Board finds
> that the requirements for entitlement to an effective date prior to
> November 1, 1995, for payments of VA compensation have not been met.
> The veteran\'s claim must therefore be denied.**

**R. at 7. Mr. Svehla then appealed to this Court.**

**II. ANALYSIS**

**In 1968, VA regulations provided that a veteran \"entitled to
\[military\] retirement pay as well as \[VA\] pension or compensation
may elect which of the benefits he desires to receive,\" but may not
receive both concurrently. 38 C.F.R. § 3.750(a), (b) (1967). This
regulation continues to exist and remains unchanged in substance today.
38 C.F.R. § 3.750(a), (b) (2002). The issue presented by this appeal is
whether the appellant received adequate notice of his right of
election.**

**Mr. Svehla argues that the Board\'s reliance on the presumption of
regularity to establish that notice concerning his right of election
under § 3.750(b) was provided is erroneous because the Board did not
recognize that the RO had failed to provide his attorney, Sol Z. Rosen,
with notice and copies of the 1968 RO decisions. Suppl. Br. at 11. The
Secretary responds that under the then-applicable VA regulations, 38
C.F.R. §§ 19.130 (\"attorneys or agents admitted to practice before
Veterans Administration\") and 19.131 (\"other persons as
representative\") (1967), VA required attorneys to provide a written
declaration containing certain specific information before they would be
considered as a veteran\'s representative, and therefore remand is not
required. Secretary\'s (Sec\'y) Suppl. Br. at 13. The Secretary\'s
argument misses the mark.**

**Mr. Svehla\'s initial claim for VA benefits was filed by Mr. Rosen (R.
at 13-18) who unequivocally on his professional letterhead identified
Mr. Svehla as his client (\"I am enclosing herewith the claim for
disability benefits from the V.A. *for my client Dennis Svehla* . . .\")
and who specifically requested that VA \"advise \[him\] of the future
processing of \[Mr. Svehla\'s\] claim for benefits.\" R. at 13 (emphasis
added). The RO complied with Mr. Rosen\'s request by sending an October
1967 letter to the claimant \"c/o Sol Z. Rosen.\" R. at 20. Mr. Svehla
has not, at any stage of this case, ever claimed that Mr. Rosen was not
acting as his representative when his disability compensation claim was
before the RO, or at any other time, for that matter.**

**At the time VA received Mr. Svehla\'s claim, VA regulation 38 C.F.R. §
1.524 (1967) provided in pertinent part: \"A duly authorized
representative will be any person authorized in writing by the claimant
to act for him, or his legally constituted fiduciary, if the claimant is
incompetent.\" *Cf.* 38 C.F.R. § 3.155 (1967) (\"Any communication or
action, indicating an intent to apply for one or more benefits under the
laws administered by the Veterans Administration, from a claimant, *his
duly authorized representative*, a Member of Congress, or some person
acting as next friend of a claimant who is not sui juris may be
considered an informal claim\" (emphasis added)). Section 1.524 would
apply in Mr. Svehla\'s case if there were (1) written authorization
allowing Mr. Rosen to \"act for\" Mr. Svehla, or (2) a finding that Mr.
Svehla was incompetent at the time, and that Mr. Rosen was his
fiduciary. Although there is neither a copy of any such authorization
nor any evidence in the file to show a finding by VA that Mr. Svehla was
incompetent, on the record before the Court Mr. Rosen clearly claimed to
represent Mr. Svehla. Furthermore, the RO, by sending a letter to Mr.
Rosen as he had requested VA to do when he filed Mr. Svehla\'s claim (R.
at 20), clearly recognized Mr. Rosen as his \"duly authorized
representative.\"**

**The Secretary, in support of his contention that VA never recognized
Mr. Rosen as Mr. Svehla\'s representative in this case, cites to
regulations such as those in Part 19 of title 38, Code of Federal
Regulations, which, in addition to § 1.524, help VA to determine whether
a veteran is represented. However, these regulations also serve to
shield veterans from unauthorized people taking action in their names.
It would be an odd result, to say the least, were the Court today to
hold that an attorney such as Mr. Rosen was not the duly authorized
representative when, as noted, he had filed with VA Mr. Svehla\'s claim,
informed VA that Mr. Svehla was his client, and was recognized as Mr.
Svehla\'s representative by VA, and when Mr. Svehla has never contested
his representation. Absent specific legal authority and detailed
procedural compliance and advance explanation, these regulations are not
intended to be and should not be used as a sword against veterans to
divest them of legitimate representation.**

**Moreover, if the RO had any question about whether Mr. Rosen was Mr.
Svehla\'s representative, or if there were any doubt as to the viability
of Mr. Rosen\'s representation of Mr. Svehla, it was the RO\'s
obligation to seek to ensure the accuracy of such a determination,
especially given Mr. Svehla\'s mental condition at that time. When the
RO was sending notices to Mr. Svehla at St. Elizabeths Hospital, his
diagnosed mental condition met the definitions in VA regulations for
someone experiencing \"\[a\]ctive psychotic manifestations\" and
\"complete social and industrial inadaptability.\" 38 C.F.R. § 4.132
(1967). Also, the evidence of record revealed then and reveals now that
in a November 16, 1967, letter to VA, Dr. Adler, a psychiatrist at St.
Elizabeths Hospital, described Mr. Svehla\'s condition as follows:**

> **At the time of his admission to the Hospital\[,\] he displayed a
> noteworthy lack of affective depth and flexibility. Although he was
> not productive of ideation which could clearly be defined as
> psychotic, his childish and shallow attitude towards the offense of
> which he was accused definitely indicated severe impairment in
> judgment and insight. A full battery of psychological tests was
> administered to the patient, the results of which indicated that his
> reality testing is faulty to a degree which can be called psychotic.
> Because of the presence of marked autistic tendencies and an affect
> disturbance, it was the conclusion of the Hospital staff that the
> patient should be diagnosed as having a Schizophrenic Reaction,
> Chronic Undifferentiated Type. . . . Diagnosis: Schizophrenic
> Reaction, Chronic Undifferentiated Type. Prognosis: Fair to poor.**

**R. at 22. The Secretary, therefore, was on notice of the severity of
Mr. Svehla\'s mental disability.**

**Taking a veteran\'s specific disabilities into consideration when
processing a veteran\'s claim is not a concept foreign to VA
adjudications. *See, e.g.,* VA Manual M21-1, pt. III, ch. 11, para.
11.09 (\"When corresponding with or processing the claim of a veteran
with visual impairment evaluated as 70 percent or more disabling, . . .
\[the RO\] will print the message \'VISUALLY IMPAIRED VSR NOTIFICATION
REQ.\' in the remarks section of the award print. The Public Contact
Team will call the veteran to relate the letter\'s content.\"). The need
for special caution in the adjudication of claims involving veterans who
are rated 100% disabled for mental disorders is self-evident. Yet,
neither the RO in the initial adjudications of this case nor the Board
in the decision before us on review appear to have considered Mr.
Svehla\'s mental condition despite the clear evidence of its
seriousness. Indeed, neither the RO nor the Board noted that while Mr.
Svehla was a patient at St. Elizabeths Hospital and during the time that
VA was adjudicating his claim, there existed, and continues to exist
today, a VA regulation applying *specifically* to individuals who are
patients at that psychiatric facility:**

> **Benefits due or becoming due any person who is a patient at St.
> Elizabeths Hospital will be paid to a duly appointed fiduciary of such
> person. The benefits payable to a veteran who has no wife, child, or
> dependent parent will be paid by an institutional award in accordance
> with § 3.852 if there is no such fiduciary. Benefits payable to
> veterans\' dependents who are patients at this hospital will be paid
> only to a fiduciary of such dependent, except that any awards now
> being paid to the superintendent will be continued while such
> dependent remains a patient.**

**38 C.F.R. § 3.851 (1967); *see also* 38 C.F.R. § 3.851 (2002). These
protective procedures for dealing with claimants who have special
problems, along with the Manual M21-1 provision cited above, stand in
stark contrast to the provision of notice of election supposedly
provided to Mr. Svehla under a \"presumption of regularity.\" The
special protections provided to patients at St. Elizabeths Hospital by §
3.851 should not be read in isolation, for to do so would create a
dichotomy whereby a claimant suffering from a mental disorder would be
entitled to no special procedures in the adjudication of his or her
claim but would become entitled to such procedure later in the
proceedings when benefits are paid. There could be no acceptable
rationale for such a distinction.**

**Thus, for these reasons and under the circumstances presented by this
case, we hold that Mr. Rosen was Mr. Svehla\'s duly authorized
representative when Mr. Rosen filed the claim for VA benefits on Mr.
Svehla\'s behalf and specifically identified Mr. Svehla as \"my
client,\" and when Mr. Rosen was recognized as Mr. Svehla\'s
representative by the RO in October 1967. Mr. Svehla was entitled to
have Mr. Rosen, as Mr. Svehla\'s representative, receive copies of all
correspondence concerning decisions on Mr. Svehla\'s claim, including
notice of his right of election, or, at a minimum, to receive notice
from VA that it was no longer recognizing Mr. Rosen as Mr. Svehla\'s
representative and the reason or reasons why. *See* 38 C.F.R. §§ 1.524,
19.109 (1967); *see also* 38 C.F.R. § 3.851 (1967). Failure to provide
such notice to his \"duly authorized representative\" vitiates the
effectiveness of any notification sent to Mr. Svehla in this case. *See
generally Austin v. Brown*, 6 Vet.App. 547, 551-52 (1994) (discussing
\"considerations of fair process\"); *Thurber v. Brown*, 5 Vet.App. 119,
123 (1993) (noting \"\'underlying concepts of procedural regularity and
basic fair play\'\" (quoting *Gonzales v. United States*, 348 U.S. 407,
411-12 (1955)). Accordingly, the Board erred in determining that Mr.
Svehla received adequate notice of the decision concerning his VA
benefits and his right of election of benefits under 38 C.F.R. §
3.750(a) and (b) and the consequences thereof.**

**Because of the Board\'s error, it did not have the opportunity to
address 38 C.F.R. § 3.750(b), which provided: \"In initial
determinations, elections may be applied retroactively if the claimant
was not advised of his right of election and the effect thereof.\"
38 C.F.R. § 3.750(b) (1967). (The current provision is the same.)
Therefore, because Mr. Svehla was not \"advised of his right of election
and the effect thereof\" pursuant to § 3.750(b), the Board\'s decision
will be reversed and the matter remanded to provide the Board with the
opportunity to determine whether Mr. Svehla\'s election should be
\"applied retroactively.\"**

**We caution, however, that in making this determination, we do not,
indeed *cannot*, hold that the decision to *grant* VA benefits to Mr.
Svehla, and the accompanying effective date of such award, is somehow a
matter still pending due to insufficient notice. Mr. Svehla has not
challenged that Board determination, and there is no indication that
that determination was \"adverse to the claimant\" under 38 U.S.C. §
7261(a)(4), as amended by the Veterans Benefits Act of 2002, Pub. L. No.
107-330, § 401, 116 Stat. 2820, 2832 (Dec. 6, 2002).**

**III. CONCLUSION**

**Upon consideration of the foregoing analysis, the ROA, and the
parties\' pleadings, the Court reverses the December 30, 1999, Board
decision and remands the matter to the Board with directions to
determine whether Mr. Svehla\'s election should be \"applied
retroactively\" and, if so, to determine both the proper date for the
commencement of payments in this case and the proper amount of any
past-due payments. In so doing, the Board should be mindful of the
effect, if any, of the veteran\'s receipt of TDRL benefits at a rate of
30% (rather than 100%) during the first three months of his eligibility
for VA disability compensation. R. at 29, 34.**

**REVERSED AN**D REMANDED.

STEINBERG, ***Judge*, concurring: Although I join in the Court\'s
opinion, I write separately to stress how far afield I find the
Secretary\'s position to be in this case. Instead of taking into account
(1) the question of Mr. Svehla\'s competency at the time of the initial
decision on his claim, (2) that he had an attorney with whom VA did not
maintain communication regarding the claim submitted by that attorney,
and (3) that VA itself had a specific regulation, 38 C.F.R. § 3.851
(1967), establishing special procedures to govern payment of VA benefits
to veteran inpatients at St. Elizabeths Hospital, VA chose to exalt
technicality over fundamental fairness. By denying the veteran\'s claim
for VA disability compensation, to which he was clearly entitled for
some 26 years but for the lack of a simple written statement that he
wished to waive receipt of his military retired pay after its apparent
termination in 1969, the Secretary has adopted a position that is
incompatible with both the nonadversarial nature of the VA adjudication
system and VA\'s mission to serve and care for our nation\'s veterans.
*See Brown v. Gardner*, 513 U.S. 115, 118 (1994) (stating, in context of
statutory interpretation, \"interpretive doubt is to be resolved in the
veteran\'s favor\"); *Hodge v. West*, 115 F.3d 1356, 1362 (Fed. Cir.
1998) (stating that \"\[t\]his court and the Supreme Court both have
long recognized that the character of the veterans\' benefits statutes
is strongly and uniquely pro-claimant\" and describing \"the
historically non-adversarial system of awarding benefits to veterans\");
*Trilles v. West*, 13 Vet.App. 314, 326 (2000) (describing \"the VA
pro-claimant nonadversarial claims adjudication process\"). What Circuit
Judge Plager wrote recently in dissent applies equally to VA\'s posture
in this case: \"What I find most troubling is the insistence by the
Government, represented before us by the Department of Justice, to
define the Government\'s justice as a \'win\' on any basis possible.\"
*Schism v. United States*, 316 F.3d 1259, 1311 (Fed. Cir. 2002) (Plager,
J., dissenting), *cert. denied*, \_\_ U.S. \_\_, No. 02-1226, 2003 WL
835021 (June 2, 2003).**