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

[No]{.smallcaps}. 01-1489

[Roque A. Acosta, Appellant]{.smallcaps},

[v.]{.smallcaps}

[Anthony J. Principi,]{.smallcaps}

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

On Appeal from the Board of Veterans\' Appeals

(Argued March 10, 2004 Decided May 14, 2004 )

*Daniel G. Krasnegor*, of Washington, D.C., for the appellant.

*Ralph G. Davis*, with whom *Tim S. McClain*, General Counsel;
*R. Randall Campbell*, Assistant General Counsel; and *Carolyn F.
Washington*, Acting Deputy Assistant General Counsel, were on the brief,
all of Washington, D.C., for the appellee.

Before IVERS, GREENE, and KASOLD, *Judges*.

GREENE, *Judge*: Veteran Roque A. Acosta appeals, through counsel, a
June 5, 2001, decision of the Board of Veterans\' Appeals (Board) that
denied him an effective date earlier than February 3, 1995, for the
award of Department of Veterans Affairs (VA) service connection for a
psychiatric disability. Record (R.) at 1-12. Mr. Acosta asserts that the
Board provided an inadequate statement of reasons or bases for its
decision on the basis that it failed to address whether his March 1983
Substantive Appeal as to an earlier VA regional office (RO) decision was
timely, and, if so, whether that appeal is still pending. He argues that
if that appeal remained pending at the time of the 1998 Board decision,
then he would be entitled to an effective date in September 1982, the
time he filed his initial claim. Appellant\'s Brief (Br.) at 5. He
further contends that in its decision the Board failed to address his
assigned disability rating, which he raised in a Notice of Disagreement
(NOD), and he seeks a remand of that matter with instructions that he be
issued a Statement of the Case (SOC) on that issue. Appellant\'s Br. at
9. The Secretary argues that the Board had a plausible basis in the
record for its decision, which should thus be affirmed. Secretary\'s Br.
9-18. He maintains that, for the purposes of determining an effective
date, the record establishes that it was \"not factually ascertainable
until 1995 when \[Mr. Acosta\] submitted new and material evidence that
a causative link between his \[psychiatric\] disability and service was
demonstrated.\" ***Id.* at 9. Finally, the Secretary asserts that Mr.
Acosta\'s contention that the Board failed to address the percentage of
disability is without merit because Mr. Acosta\'s Substantive Appeal to
the Board and testimony before the Board expressed dissatisfaction only
with the effective date of the grant of service connection, not the**
disability rating. *Id*. This appeal is timely, and the Court has
jurisdiction pursuant to 38 U.S.C. §§ 7252(a) and 7266(a). Because we
hold that the Board\'s statement of reasons or bases concerning the
effective date is inadequate, the June 5, 2001 decision will be vacated
and that matter remanded. The Court also holds that Mr. Acosta did file
an NOD as to his assigned disability rating, and, thus, on remand VA
must comply procedurally by issuing an SOC.

**I. FACTS**

Mr. Acosta served honorably on active duty in the U.S. Army from August
1975 to November 1975 and from May 1976 to May 1979. R. at 14-15. In
September 1982, he filed a claim for VA service connection for a nervous
condition, and on March 21, 1983, the RO denied that claim. R. at
109-11. He filed a timely NOD on March 8, 1984, disagreeing with that
decision. R. at 209, 211. On May 1, 1984, the RO issued an SOC along
with a cover letter that stated: \"If we do not hear from you in 60
days, we will assume you do not intend to complete your appeal and we
will close our record. If you require more time, please let us know
within 60 days.\" R. at 215-17. On June 26, 1984, the RO received an
unsigned letter from Mr. Acosta stating:

> I have evidence, or will obtain evidence, that will verify that I had
> at least one visit to a psychiatric facility, within one year of
> discharge from service. I am in the process of locating these records,
> and I am requesting additional time in\[\]order to prepare my case.

R. at 219. There is no indication in the record that VA responded to
this statement. *See* R. at 1-679. VA received no further correspondence
from Mr. Acosta on this matter until February 3, 1995, when he filed a
request for a review of his files regarding his \"current disability
status.\" R. at 223. On February 21, 1995, the RO requested
clarification from Mr. Acosta regarding the "nature of the illness,
disease or injury" for which he was claiming benefits. R. at 227. In
March 1995, he submitted a statement in support of his claim, which
stated:

> In 1979 I was admitted to the Veteran's Hospital in Westwood, CA. In
> 1980 I was admitted to the Veteran's Hospital in Palo Alto, CA. After
> that I was also admitte\[d\] to the Valley Medical Center in San Jose,
> CA\[. A\]ll these admissions were for psychiatric illness. I'm still
> currently under a doctor's care at \[an\] out\[-\]patient facility in
> San Jose, CA. Please update me as to the status of my service\[-\]
> connected disability.

R. at 229. The RO then advised him that under 38 U.S.C. § 5108 he needed
to present new and material evidence to reopen his claim. R. at 231.

In October 1995, the RO, after finding that new and material evidence
had not been presented, declined to reopen Mr. Acosta's claim for
service connection for a psychiatric disorder. R. at 257-58. In June
1996, Mr. Acosta appealed and submitted additional evidence from his VA
psychiatrist. R. at 276-77, 280-81. Additionally, Mr. Acosta and his
wife testified under oath at a hearing held in November 1996. R. at
283-300. A Supplemental SOC (SSOC) was issued later that month. R. at
302-04. Another hearing was held in July 1997, during which Mr. Acosta
again testified under oath about the onset of his condition. R. at
312-31. In January 1998, the Board found that he had presented new and
material evidence to reopen his claim for a psychiatric disability
diagnosed as schizophreniform psychosis. R. at 333-40. The Board also
found:

> In December 1982, the RO administratively denied the veteran\'s claim
> for entitlement to service connection for a psychosis on the basis
> that mental illness was not shown by the evidence of record. Most
> recently, in a March 1983 rating decision, the RO denied the
> veteran\'s claim again because the veteran\'s psychosis was not shown
> to have been present within one year after service. The veteran was
> notified of the decision and did not file a timely appeal. As a
> result, the March 1983 decision subsequently became final one year
> later.

R. at 335. The matter was remanded to the RO for further development of
the reopened claim. R. at 333-40.

In October 1998, the RO awarded Mr. Acosta service connection for
chronic paranoid schizophrenia rated at a 70% disability rating,
effective from February 3, 1995. R. at 536-41. In November 1998, Mr.
Acosta filed an NOD concerning the effective date, stating that he had
continuously pursued an appeal of the denial of his initial claim since
it was disallowed in March 1983. R. at 543. Additionally, in February
1999, Mr. Acosta also filed the following statement:

> I disagree with your decision of 10/19/98 granting 70% service
> connection for my schizophrenia. I feel my disability prevented me
> from working and I am unable to function socially. My condition has
> worsened greatly\[. \]I have been unable to work for 4+ years. I am
> \[being\] treated at \[the\] VA \[outpatient\] clinic in San Jose, CA.
> . . . My \[doctor\] has stated my schizophrenia has worsened. My
> social adaptability is [nil]{.underline}.

R. at 571 (emphasis in original). There is no indication in the record
that VA responded to this statement. *See* R. at 1-679. In March 1999,
Mr. Acosta filed an application for a rating of total disability based
on individual unemployability (TDIU) on the basis that he had been
self-employed and was no longer able to perform his work. Supplemental
(Suppl.) R. at 19. In May 2000, the RO awarded Mr. Acosta a rating of
TDIU, effective February 3, 1995. Suppl. R. at 26. The RO also continued
Mr. Acosta\'s 70% disability rating for chronic paranoid schizophrenia.
*Id*. There is no evidence in the record on appeal that Mr. Acosta
appealed that decision. *See* R. at 1-679.

A hearing was held on February 14, 2001, at which Mr. Acosta and his
wife both testified that he had completed all the paperwork he received
from the RO for both the original claim in 1982 and the appeal that
followed. R. at 611-26. Mrs. Acosta also testified, however, that
because of financial difficulties and the couple\'s many changes of
address during that appeal period, it was reasonable to believe that
they may not have received the necessary paperwork for filing a
Substantive Appeal. R. at 614.

In the June 2001 decision here on appeal, the Board found:

> In March 1984, the veteran filed a timely \[NOD\] with the March 1983
> RO rating decision denying service connection for chronic psychiatric
> disability, and \[an SOC\] addressing the matter (with attached cover
> letter and VA form 1-9) was issued on May 1, 1984\[,\] and sent to him
> at his last known address of record.

. . . .

> By (unsigned) letter received by the RO in June 1984, the veteran
> referred to correspondence dated May 1, 1984 (thereby suggesting that
> he had received the May 1, 1984 \[SOC\]), and indicated that he was in
> the process of securing evidence in support of his claim of service
> connection for chronic psychiatric disability; he requested
> \"additional time\" to prepare his \"case,\" noting that he would
> submit additional evidence as soon as it became available.
>
> . . . .
>
> No further correspondence was received from, or on the veteran\'s
> behalf, until April 30, 1985, at which time he submitted to the RO
> documents unrelated to his service\[-\]connection claim; no mention
> was made of any claim of service connection for any disability.
>
> . . . .
>
> As the veteran did not perfect his appeal (by filing a timely
> \[S\]ubstantive \[A\]ppeal) from the March 1983 RO rating decision
> denying his claim of service connection for chronic psychiatric
> disability, that decision became final and is not subject to revision
> on the same factual basis.

R. at 5-6. Based on these findings, the Board concluded that the
criteria for an effective date earlier than February 3, 1995, for Mr.
Acosta's award of service connection had not been met. R. at 1-11. The
Board also stressed that the only issue then on appeal was \"entitlement
to an earlier effective date for the award of service connection for
chronic psychiatric disability.\" R. at 10. The Board specifically found
that \"the issue of timeliness or adequacy of \[a\] \[S\]ubstantive
\[A\]ppeal following the March 1983 RO denial of service connection for
psychiatric disability \[was\] [not]{.underline} now before the Board.\"
*Id.* (emphasis in original). The Board noted that the January 1998
Board decision had already found that Mr. Acosta had not appealed the
1983 RO decision. R. at 11. The Board did not address, nor did Mr.
Acosta specifically raise, any issues concerning Mr. Acosta\'s February
1999 statement that disagreed with his 70% disability rating. R. at
1-11. This appeal followed.

**II. ANALYSIS**

A. Effective Date

Generally, \"the effective date of an award based on an original claim,
a claim reopened after final adjudication, or a claim for increase, of
compensation, dependency and indemnity compensation, or pension, shall
be fixed in accordance with the facts found, but shall not be earlier
than the date of receipt of application therefor.\" 38 U.S.C. § 5110(a);
*see also* 38 C.F.R. § 3.400 (2003); *Crawford v. Brown*, 5 Vet.App. 33,
35 (1993). In *Myers v. Principi*, 16 Vet.App. 228 (2002), the Court
held that a VA procedural error can cause a claim stream to remain open
regardless of the length of time that has passed. The \"resolution of
the question of whether the Board accurately determined the effective
date requires the Court to decide whether the Board erred in its
fact\[\]finding.\" *Scott v. Brown*, 7 Vet.App. 184, 188 (1994) (quoting
*Quarles v. Derwinski*, 3 Vet.App. 129, 135 (1992)). When reviewing the
Board\'s factfinding, the Court may only \"hold unlawful and set aside
or reverse such finding if the finding is clearly erroneous.\" 38 U.S.C.
§ 7261(a)(4); *see Lovelace v. Derwinski*, 1 Vet.App. 73 (1990);
*Gilbert v. Derwinski*, 1 Vet.App. 49, 52-53 (1990). Under this
standard, the Court may overturn the Board\'s factual determinations
only when there is no plausible basis in the record for them. *See
Smallwood v. Brown*, 10 Vet.App. 93, 97 (1997); *Gilbert*, 1 Vet.App. at
49.

The Board is required to review and adjudicate all issues reasonably
raised before it. *See Suttmann v. Brown*, 5 Vet.App. 127, 132 (1993).
In addition, the Board is required to provide a written statement of the
reasons or bases for its findings and conclusions on all material issues
of fact and law presented on the record; the statement must be adequate
to enable a claimant to understand the precise basis for the Board\'s
decision, as well as to facilitate review in this Court. ***See* 38
U.S.C. § 7104(d)(1); *Allday v. Brown*, 7 Vet.App. 517, 527 (1995);
*Gilbert*, 1 Vet.App. at 57. To comply with this requirement, the Board
must analyze the credibility and probative value of the evidence,
account for the evidence that it finds to be persuasive or unpersuasive,
and provide the reasons for its rejection of any material evidence
favorable to the claimant. *See Caluza v. Brown*, 7 Vet.App. 498, 506
(1995), *aff\'d per curiam***, 78 F.3d 604 (Fed. Cir. 1996 table).

Under applicable law and VA regulations, a claimant may appeal an RO
decision by filing an NOD within one year from the date that the RO
mails notice of the decision. *See* 38 U.S.C. § 7105(b)(1); 38 C.F.R.
§ 20.302(a) (2003). Upon receipt of a timely NOD, the RO must issue an
SOC, and a Substantive Appeal must be filed by the appellant within 60
days from the date that the RO mails the SOC to the appellant. 38 U.S.C.
§§ 5104 and 7105; 38 C.F.R. § 3.103(f) (2003); 38 C.F.R. § 20.302(b)
(2003). VA regulations allow a claimant to request an extension of the
time for filing a Substantive Appeal from an RO decision, based upon a
showing of good cause. *See* 38 C.F.R. § 20.303 (2003). The 1983 version
of the regulation stated:

> An extension of the 60-day period for filing a \[S\]ubstantive
> \[A\]ppeal or the 30-day period for responding to the a\[n SSOC\] may
> be granted for good cause shown. A request for such an extension
> should be in writing and must be made prior to expiration of the
> \[S\]ubstantive \[A\]ppeal. The request for extension should be filed
> with the \[VA\] office from which the claimant received notice of the
> determination being appealed. That same office *will* make a
> determination as to extension. A denial of a request for extension may
> be appealed to the Board.

38 C.F.R. § 19.130 (1983) (emphasis added).

Mr. Acosta argues that the Board\'s statement of reasons or bases
concerning his entitlement to an earlier effective date was inadequate
because it failed to address whether VA\'s failure to respond to Mr.
Acosta\'s timely request for an extension kept his claim open and thus
pending at the time service connection was awarded. Appellant\'s Br. at
4-7. Mr. Acosta contends that on June 26, 1984, he filed a timely
request for an extension of time to complete his Substantive Appeal, but
that the RO never acted on the request as required under 38 C.F.R. §
19.130 (1983). He contends that in its June 2001 decision the Board
should have considered whether the RO\'s failure to act on or respond to
his request for an extension was a procedural error that tolled the
appeal period for the March 1983 decision. Appellant\'s Br. at 4-8.
Concerning this issue the Board stated:

> The Board is mindful of the veteran's and his spouse's contention
> . . . to the effect that he continuously pursued his claim of service
> connection for chronic psychiatric disability since the time he
> initially filed his claim in September 1982. They contend,
> essentially, that he did perfect a timely appeal from the March 1983
> RO decision denying service connection for psychiatric disability.
> They contend, in the alternative, that they were forced, by various
> circumstances beyond their control, to move frequently beginning in
> 1979, and that he therefore did not receive notice from the RO,
> informing him of the necessity and the time limit for the filing of
> \[S\]ubstantive \[A\]ppeal (the Board notes that the evidence of
> record clearly shows that he did receive the May 1, 1984 \[SOC\], with
> attached VA Form 9, as he made reference to the \[SOC\] in his letter
> received by the RO in June 1984). The Board stresses, however, that
> the only matter currently on appeal consists of entitlement to an
> earlier effective date for the award of service connection for chronic
> psychiatric disability; the issue of timeliness or adequacy of
> \[S\]ubstantive \[A\]ppeal following the March 1983 RO denial of
> service connection is [not]{.underline} now before the Board.
>
> On February 3, 1995, the veteran filed an application to reopen the
> claim of service connection for chronic acquired psychiatric
> disability. Although his claim had been denied by the RO in October
> 1995, by decision in January 1998, the Board found that new and
> material evidence had been submitted in support of the
> service\[-\]connection claim. In addition to finding that the veteran
> submitted new and material evidence in support of his claim of service
> connection for chronic psychiatric disability, the Board determined,
> in January 1998, that his service connection claim was previously
> disallowed by the RO and not appealed in a timely fashion; the Board
> thus found that the March 1983 RO rating decision was final.

R. at 10-11 (emphasis in original). The Secretary contends that it was
the 1998 Board decision and not the 2001 Board decision that had
adjudicated the issue of whether Mr. Acosta failed to submit a timely
Substantive Appeal to the March 1983 RO decision. Therefore, the
Secretary argues that because Mr. Acosta did not appeal the 1998 Board
decision to the Court, that decision became final and the Court cannot
now revisit the issue. We reject this argument.

In *Breeden v. Principi*,17 Vet.App. 425 (2004), the Court held that the
Board\'s remand of the veteran\'s claim to the RO was not an adverse
final decision over which the Court had jurisdiction. *See also* 38
C.F.R. § 20.1100(b). Similarly, in this case the Board's remand in
January 1998 of Mr. Acosta's claim did not constitute a final decision
of his earlier claim because further development of the claim could
affect the decision on the award's effective date. Furthermore, at the
time of the remand, Mr. Acosta had not been awarded service connection.
Thus, no effective\[-\]date determination was required. Only after he
was awarded service connection and assigned an effective date, and those
decisions had been reviewed finally by the Board, could he appeal to
this Court concerning the effective date or rating assigned. *See
Matthews v. Principi*, 15 Vet.App. 138, 139 (2001) (dismissing for lack
of jurisdiction because no final Board decision had been made). Mr.
Acosta was awarded service connection after the claim was reopened; the
issue of his effective date was raised before the RO; and he then
appealed the matter to the Board in June 2001.

During its review of the claim, the Board had an obligation to consider
all reasonably raised matters regarding the issue on appeal. We are
satisfied that the question of whether Mr. Acosta's 1982 claim remained
pending as a result of VA's failure to respond to his timely request for
an extension to file a Substantive Appeal was reasonably raised before
the Board. *See Suttmann, supra*. Therefore, the Board's failure to
address whether the claim remained open rendered its statement of
reasons or bases inadequate. Thus, the decision will be vacated and this
matter remanded to the Board for further adjudication. On remand, the
Board should address the requirements of 38 C.F.R. § 19.130 (1982), and
their effect, if any, on the question of whether Mr. Acosta\'s 1982
claim remained pending at the time the RO awarded him service connection
in 1998.

B. Increased Disability Rating

As an initial matter, the Court notes that the appellant did not raise
before the Board any of the arguments that he now raises before the
Court. Nevertheless, the \"Court may hear legal arguments raised for the
first time with regard to a claim that is properly before the Court.\"
*Maggitt v. West*, 202 F.3d 1370, 1377 (Fed. Cir. 2000). Mr. Acosta\'s
claim is properly before the Court, and he raises appropriate argument
concerning the elements of that claim. Here, Mr. Acosta argues that the
Board erred by failing to address the NOD he filed in February 1999
concerning the assigned disability rating. He seeks a remand of the
matter with instructions to the Board that he be issued an SOC.
Appellant\'s Br. at 9. The Secretary argues that Mr. Acosta\'s February
1999 statement was not an NOD regarding the 70% rating for
schizophrenia, but instead was an application for compensation for TDIU,
which was granted in February 1999. Secretary\'s Br. at 17. The
Secretary suggests that, because Mr. Acosta stated, \"I feel my
disability prevents me from working and I am unable to function
socially\" and \"I have been out of work for 4+ years\" this form should
be taken exclusively as a request for a TDIU rating. *Id*. The
Secretary\'s argument is only partly correct.

Whether a document constitutes an NOD is a question of law, which this
Court reviews de novo. *See* 38 U.S.C. § 7261(a)(1); *Buckley v. West*,
12 Vet.App. 76, 82 (1998) (quoting *Beyrle v. Brown*, 9 Vet.App. 24,
27-28 (1996)). An NOD is defined by regulation as \"\[a\] written
communication from a claimant or his or her representative expressing
dissatisfaction or disagreement with an adjudicative determination by
the \[RO\] and a desire to contest the result\"; it \"must be in terms
which can be reasonably construed as \[expressing\] disagreement with
that determination and a desire for appellate review.\" 38 C.F.R. §
20.201 (2003); ***see Roy v. Brown***, 5 Vet.App. 554, 555 (1993)
(noting that \"appellate review of an RO decision is initiated by an
NOD\"). Mr. Acosta\'s February 1999 letter states: \"I *disagree* with
your decision of 10/19/98 granting 70% service connection for my
schizophrenia.\" R. at 571 (emphasis added). His expression of
disagreement with the 1998 RO decision is clear and is, upon de novo
review, sufficient to constitute an NOD. *See Buckley* and *Beyrle*,
both *supra.*

The Secretary also argues that even if the February 1999 statement is
considered to be an NOD, a remand of the matter is not required because
in May 2000 the RO awarded Mr. Acosta a TDIU rating with an effective
date the same as that assigned for his award of service connection for
schizophrenia, giving him \"substantially the same benefit that he would
have received had he met the criteria for total schedular rating.\"
Secretary\'s Br. at 17. A veteran is eligible for a TDIU rating only
where the schedular rating is less than total. Therefore, he argues that
if Mr. Acosta had been granted a 100% disability rating for his
schizophrenia then any claim for a TDIU rating would have been moot.
*See* 38 C.F.R. § 4.16(a) (2003). However, the same is not true for an
individual who has been granted a TDIU rating and still seeks a 100%
schedular rating. The Secretary\'s argument fails to consider completely
the value of having a 100% schedular rating and that there are benefits
that flow from having a 100% schedular rating that are not available
under a TDIU rating. For example, 100% schedular ratings are more
difficult to reduce than TDIU ratings. Total disability ratings, when
warranted by the severity of the condition and not granted purely
because of hospital, surgical, or home treatment, or individual
unemployability, will not be reduced, in the absence of clear error,
without examination showing material improvement in physical or mental
condition. *See* 38 C.F.R. § 3.343 (2003). Also, as Mr. Acosta notes in
his brief, there is special monthly compensation available for veterans
who are permanently housebound that is payable only if the veteran has a
\"single service-connected disability rated as 100\[%\].\" 38 C.F.R.
§ 3.350(i)(2) (2003). Furthermore, the Court has previously concluded
that schedular and extraschedular rating-increase claims are not
necessarily \"inextricably intertwined\" with TDIU rating claims
predicated on the same condition. *Colayong v. West*, 12 Vet.App. 524,
537 (1999). Taking this into consideration along with the benefits that
come with a 100% schedular rating that are not available under a
TDIU-rating, it is evident that the award of a TDIU rating does not moot
a claim for a 100% schedular rating. Therefore, Mr. Acosta\'s NOD
concerning the disability rating assigned in October 1998 remains
pending, and VA on remand must comply procedurally by providing him an
SOC. *See* 38 U.S.C. § 7105(d)(1).

**III. CONCLUSION**

Upon consideration of the foregoing, the June 5, 2001, decision of the
Board is VACATED and the matters REMANDED for further adjudication
consistent with this opinion.