Note: Pursuant to 38 U.S.C. § 4067(d) (1988),

this decision will become the decision of the

Court thirty days from the date hereof.

**UNITED STATES COURT OF VETERANS APPEALS**

No. 90-86

[Emilio C. Manio, Appellant]{.smallcaps},

[v]{.smallcaps}.

[Edward J. Derwinski,]{.smallcaps}

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

On Appeal from the Board of Veterans\' Appeals

(Submitted October 23, 1990 Decided February 15, 1991)

*Emilio C. Manio,* *pro se.*

*Raoul L. Carroll*, General Counsel, *Barry M. Tapp*, Assistant General
Counsel, *Pamela L. Wood*, Deputy Assistant General Counsel, and
*Carolyn F. Washington* were on the brief for appellee.

Before KRAMER, FARLEY, and MANKIN, *Associate Judges*.

MANKIN, *Associate Judge*: Appellant, Emilio C. Manio, has repeatedly
sought disability compensation for pyorrhea and resulting tooth loss.
The denial of appellant\'s claim for service connection was initially
upheld by the Board of Veterans\' Appeals (BVA) in a January 27, 1988,
decision. Following his submission of new evidence, appellant\'s claim
was reopened but the denial of service connection was again affirmed in
a November 14, 1988, decision by the BVA. Subsequently, appellant
submitted the medical opinion of Dr. Dela Pena as a new evidentiary
basis upon which to reopen his claim. The BVA, in a November 20, 1989,
decision, once again upheld the denial of service connection and this
appeal followed. Jurisdiction of the Court is based upon 38 U.S.C. §
4052 (1988).

We first briefly review the factual background of appellant\'s claim.
The Court then considers the defense of laches raised by the Secretary
and concludes that laches is not a defense to the veteran\'s claim for
service-connected disability compensation. The Court then discusses the
regulations which allow compensation for dental disabilities. Next, the
Court discusses title 38 United States Code sections 3008 and 4004(b)
(1988) and sets out the two-step analysis to be employed when a veteran
seeks to reopen a claim previously denied by the BVA on the basis of
\"new and material evidence\". Finally, the Court remands the veteran\'s
claim to the BVA for the limited purpose of considering the veteran\'s
claim in light of all the evidence presented by appellant in the present
and prior appeals.

***The Factual Background***

Appellant served with a recognized guerilla unit in the Philippines from
June 11, 1945, to October 22, 1945; he then began service with the Army
of the Commonwealth of the Philippines. Veterans of both these groups
are entitled to compensation for service-connected disabilities. *See*
38 U.S.C. §§ 107(a), 310 (1988). When discharged from his service on
December 26, 1945, appellant was apparently missing fourteen teeth, with
three more non-restorable. R. at 2. Appellant claims that his tooth loss
occurred in the course of his service during the summer and fall of
1945.

Appellant\'s discharge examination on December 28, 1945, showed that he
had \"pyorrhea, chronic . . . carious teeth . . . .\" R. at 2. Appellant
contends that pyorrhea developed in service and was the cause of his
tooth loss. Br. at 3-4. Pyorrhea was not detected at the time of
appellant\'s examination for induction into the Army of the Commonwealth
of the Philippines on October 23, 1945. R. at 3. (The report of
appellant\'s examination for induction into the Army of the Commonwealth
of the Philippines is erroneously designated in the Record on Appeal as
part of the veteran\'s discharge examination; the discharge examination
is clearly dated \"28 Dec. \'45\" while the induction examination is
dated \"23 Oct 45\". R. at 2-3.) The BVA dismissed this evidence in
appellant\'s initial appeal: \"no indication was given that pyorrhea or
a pyorrhetic condition, was the underlying reason that any of the
veteran\'s teeth were missing.\" *Emilio C. Manio*, loc. no. 802573, at
3 (BVA Jan. 27, 1988).

Contained within appellant\'s discharge examination is a notation to the
effect that appellant\'s condition was not incurred in the line of duty.
The BVA has considered appellant\'s claim on three separate occasions
and has never mentioned this notation. R. at 16, 31, 46. An injury or
disease incurred during active service is considered to have occurred in
the line of duty unless: (1) it was the result of the service member\'s
willful misconduct; or (2) was incurred while the service member was
either (a) confined by court sentence, or (b) avoiding service. At the
time of the veteran\'s service these provisions had been enacted into
law, *see* Act of Sept. 27, 1944, Pub. L. No. 78-439, ch. 426, 58 Stat.
752 (1944), essentially the same provisions are today found at 38 U.S.C.
§ 105 (1988), and are also found at 38 C.F.R. §§ 3.1(m), (n), and 3.301
(1990). Aside from the absence of any record indicating any of these
disqualifications, the nature of appellant\'s disease also argues
strongly against the applicability of any of these disqualifications.

Prior to his second appeal to the BVA, appellant submitted the sworn
statements of three of his fellow veterans as new evidence. Two of the
affiants were veterans who stated that they served with appellant. R. at
20. They averred that during October 1945 appellant was frequently heard
to complain about his teeth and gums. They also corroborated
appellant\'s contention that many of his teeth were removed by the
Dental Surgeon, Lieutenant Salvador. The sworn statement of Lieutenant
Salvador was also submitted by appellant. Lieutenant Salvador stated:

> That sometime in October 1945 after a rigid examination to the extent
> of my available facilities and having determined that Mr. Manio, then
> a Private, needed the extraction of his upper left and right central,
> lateral, and cuspid teeth due to pyorrhea, these teeth were thus
> extracted by me at my mobile clinic at Barrio Cansinala, Apalit,
> Pampanga.

R. at 21.

The BVA was unpersuaded by this evidence, noting that one of the teeth
which Lieutenant Salvador claimed to have removed was indicated by
appellant\'s discharge examination to be present and in good condition.
*Emilio C. Manio*, loc. no. 833536, at 4 (BVA Nov. 14, 1988). Appellant
sought to explain this discrepancy by stating that his teeth were
removed over a period of time. R. at 36. Comparison of appellant\'s
October and December dental charts suggests that this dental extraction
occurred prior to appellant\'s October induction into the Army of the
Commonwealth. However, the dental charts are not accurate enough to say
that with any confidence. If the charts are to be believed, appellant
lost five teeth after the October examination but grew back six other
teeth. Finally, in his third appeal to the BVA, appellant offered the
sworn statement of dentist Dr. Dela Pena. His expert testimony that
pyorrhea was the cause of appellant\'s tooth loss corroborated the
testimony of Lieutenant Salvador\--albeit over forty years after the
fact.

***Laches***

The Secretary contends that the veteran\'s claim is barred by the
equitable doctrine of laches. Before addressing the merits of
appellant\'s claim, we first examine this novel defense.

As a threshold matter we are presented with the issue of whether or not
this Court, a court of law created under Article I, has jurisdiction to
apply equitable defenses such as laches. A review of cases from other
Article I courts show a general acceptance of such defenses. In *Woods
v. Commissioner*, 92 T.C. 776, 784-89 (1989), the Tax Court concluded
that equitable doctrines could properly be asserted in cases over which
an Article I court had jurisdiction but that care must be taken to
ensure that such doctrines not be used to extend the court\'s statutory
grant of jurisdiction. We are persuaded by the discussion in *Woods* and
hold that we may consider the application of equitable defenses.

The doctrine of laches, which is rooted in public policy concerns that
stale claims not be the subject of litigation, has two elements: (1)
inexcusable delay on the part of the claimant, and (2) prejudice
resulting therefrom to the detriment of defendant. *Pepper v. United
States*, 794 F.2d 1571, 1573 (Fed. Cir. 1986). \"Failure to act promptly
will operate as a bar to recovery *where the delay results in injury*
\[or\] *prejudice* to the adverse party.\" *Deering v. United States*,
620 F.2d 242, 244 (Ct. Cl. 1980) (en banc) (emphasis added) (quoting
*Brundage v. United States*, 504 F.2d 1382, 1384 (Ct. Cl. 1974)). The
applicability of laches is a matter left to the discretion of the Court.
*See* *Czaplicki v. The S.S. Hoegh Silvercloud*, 351 U.S. 525, 534
(1956); *see also Jamesbury Corp. v. Litton Indus. Prods., Inc*., 839
F.2d 1544, 1551 (Fed. Cir. 1988), *cert. denied*, 488 U.S. 828 (1988).

There is no statute of limitations on the claiming of service-connected
disability benefits. Even when there is no statute of limitation for
initiating a cause of action, courts will often bar stale claims under
the doctrine of laches. *See, e.g., Stevens v. Tennessee Valley Auth*.,
712 F.2d 1047, 1056 (6th Cir. 1983) (Veterans Preference Act claim
against TVA governed by laches since Congress had specified no statute
of limitations in the most analogous federal cause of action). However,
the fundamental reasons for the creation and the continued existence of
the Department of Veterans Affairs (VA), as well as its policies and
procedures, counsel against the application of the equitable defense of
laches to claims submitted by or on behalf of veterans.

A party seeking to invoke laches must show that it has been prejudiced
by the claimant\'s delay in bringing his claim. *See Deering,* 620 F.2d
at 245-46. The Secretary contends here that \"excessive delay has
prejudiced \[the Government\'s\] ability to mount a defense\" (Br. at
15), but that argument rings hollow because the Secretary does not
defend claims. *See* 38 C.F.R. § 3.103(a) (1990). Rather than defending
against the claims of veterans, the Secretary has a statutory duty to
assist claimants during the course of the *ex parte* and non-adversarial
claims resolution process at the regional office and before the BVA.
*See* 38 U.S.C. § 3007(a) (1988). Moreover, \"\[i\]t is the obligation
of VA . . . to render a decision which grants \[the veteran\] every
benefit that can be supported in law while protecting the interests of
the Government.\" 38 C.F.R. § 3.103(a). The legislative history of the
Act which created this Court, the Veterans\' Judicial Review Act (VJRA),
Pub. L. No. 100-687, indicates that VA is to adjudicate claims in a
manner sympathetic to veterans.

> Congress has designed and fully intends to maintain a beneficial
> non-adversarial system of veterans benefits. This is particularly true
> of service-connected disability compensation where the element of
> cause and effect has been totally by-passed in favor of a simple
> temporal relationship between the incurrence of the disability and the
> period of active duty.
>
> I\[m\]plicit in such a beneficial system has been an evolution of a
> completely ex-parte system of adjudication in which Congress expects
> VA to fully and sympathetically develop the veteran\'s claim to its
> optimum before deciding it on the merits. Even then, VA is expected to
> resolve all issues by giving the claimant the benefit of any
> reasonable doubt. *In such a beneficial structure there is no room for
> such adversarial concepts as cross examination, best evidence rule,
> hearsay evidence exclusion, or strict adherence to burden of proof*.

H.R. Rep. No. 963, 100th Cong., 2d Sess. 13, *reprinted in* 1988 U.S.
Code Cong. & Admin. News 5782, 5795 (emphasis added).

The VJRA also militates against the application of the equitable defense
of laches to veterans\' claims. Our jurisdiction is confined to the
review of decisions issued by the BVA. 38 U.S.C. § 4052(a) (1988). As a
court of review, our task is to review BVA decisions based upon the
record before the BVA, not to consider for the first time defenses,
contentions, or arguments which were not raised before the Board. *See
Branham v. Derwinski*, U.S. Vet. App. No. 90-193, slip op. at 2 (Dec. 7,
1990). The Secretary may not raise a defense of laches on appeal where
the issue was not before the BVA below. Our jurisdiction is further
limited to only those cases in which the claimant has filed a Notice of
Appeal within 120 days after the date of mailing of the BVA decision.
38 U.S.C. § 4066(a) (1988). In view of this strict statutory provision,
there can be no basis for the application of the doctrine of laches to
this appeal. Appeals are either timely filed or they are not.

In many instances disabilities incurred in service to this country may
not become disabling until years later. The debt this nation owes to its
disabled veterans lasts for a lifetime and should not be limited to
those veterans who are prompt in asserting their right to compensation.
It is hard to imagine that the equitable defense of laches can have any
place in the judicial review of veterans\' claims for disability
benefits, but we are not required to address the issue definitively
under the circumstances of this case.

***Compensation For Dental Disabilities***

The BVA in its decisions is bound by the regulations of VA.
38 U.S.C. § 4004(c) (1988); *Payne v. Derwinski*, U.S. Vet. App. No.
89-172, slip op. at 4 (Nov. 19, 1990). \"Pyorrhea shown during service
after a reasonable period of service, involving one or more teeth
necessitating extraction, is a sufficient basis for grant of service
connection for the tooth or teeth involved.\" 38 C.F.R. § 3.382(c)
(1990); *see also* 38 C.F.R. § 3.381(b) (1990) (pyorrhea present before
service can form basis for service-connected disability). Lieutenant
Salvador testified that appellant\'s teeth were removed in October 1945,
approximately four months after appellant began service; we believe that
four months clearly satisfies the \"reasonable period of service\"
requirement.

Section 3.382(c) also contains a possible disqualification of
appellant\'s claim which is quoted but not discussed by either the BVA
or appellee. The regulation requires confirmation of a diagnosis of
pyorrhea \"by a Department of Veterans Affairs examination, including
X-ray \[sic\], before grant of service connection, *unless examination
is contraindicated* by factors such as extraction of all pyorrhectic
\[sic\] teeth.\" (Emphasis added). Apparently no x ray examination was
performed to confirm the diagnosis of pyorrhea at the time of
appellant\'s discharge. On remand, the BVA should determine whether, in
light of the principles relating to service connection which require VA
\"to administer the law under a broad and liberal interpretation
consistent with the facts in each individual case\" (38 C.F.R. §
3.303(a) (1990)), the x ray requirement was \"contraindicated\" under
the terms of § 3.382(c).

***New and Material Evidence***

Under 38 U.S.C. § 4004(b), once the BVA has considered and upheld the
denial of a claim for benefits, the BVA cannot subsequently reopen and
allow that claim. The exception to this rule is 38 U.S.C. § 3008:

> If new and material evidence is presented or secured with respect to a
> claim which has been disallowed, the Administrator shall reopen the
> claim and review the former disposition of the claim.

Therefore, the BVA must perform a two-step analysis when a veteran seeks
to reopen a claim based upon new evidence.

First, the BVA must determine whether the evidence is \"new and
material\". 38 U.S.C. § 3008. Second, if the BVA determines that the
claimant has produced new and material evidence, the case is reopened
and the BVA must evaluate the merits of the veteran\'s claim in light of
*all* the evidence, both new and old. *Cf. Reinhart v. Schweiker*,
590 F. Supp. 78, 80 (W.D. Mich. 1984) (where a social security
disability claim is reopened, it is proper for district court to review
entire claim made in second application even though all or part of claim
may have been brought in the original application for benefits). A
contrary rule would inevitably lead to absurd results. A veteran who was
clearly entitled to disability benefits could be denied those benefits
solely because he presented his evidence in the course of two
proceedings rather than one. Furthermore, the statutory requirement that
the former disposition be reviewed can only be fulfilled if all the
evidence is considered. VA regulations appear to recognize this need by
stating that \"\[d\]eterminations as to service connection will be based
on review of the entire evidence of record . . . .\" 38 C.F.R.
§3.303(a). The new evidence may not be sufficient in and of itself, but
it may be just enough, when all of the evidence is considered, to create
an \"approximate balance of positive and negative evidence\" which would
entitle the veteran to the \"benefit of the doubt\". 38 U.S.C. § 3007(b)
(1988).

The relevant legislative history confirms that Congress intended § 3008
to allow for reevaluation of evidence from previously denied claims.

> By these changes, the committee intends to create a more certain basis
> for the reopening of claims that have been considered and disallowed
> by the Board. Moreover, under these changes . . . an attorney entering
> a case following a disallowance by the Board would not always be
> restricted, in appealing to court, to relying on the administrative
> record in existence when the attorney entered the case. Rather, by
> virtue of these proposed changes an attorney would have an opportunity
> to attempt *to ensure that the administrative decision is made on the
> basis of all appropriate evidence* and arguments, by seeking either a
> mandatory reopening for new and material evidence or a discretionary
> reopening for good cause shown.

S. Rep. No. 418, 100th Cong., 2d Sess. 34 (1988) (emphasis added). The
ability to seek a reopening for good cause shown was dropped in the
compromise reached with the House of Representatives. 134 Cong. Rec.
S16, 653, *reprinted in* 1988 Code Cong. & Admin. News 5834, 5840-41.

The VA regulation dealing with this framework, 38 C.F.R. § 19.194
(1990), promulgated prior to adoption of 38 U.S.C. § 3008, provides:

> When a claimant requests that a claim be reopened after an appellate
> decision and submits evidence in support thereof, a determination as
> to whether such evidence is new and material must be made and, if it
> is, whether it provides a new factual basis for allowing the claim. An
> adverse determination as to either question is appealable.

While it is possible to read this regulation as requiring that the new
evidence *by itself* must provide the new factual basis, such a reading
would, in our view, be inconsistent with the statutory framework created
by 38 U.S.C. §§ 4004(b) and 3008.

If the BVA refuses to reopen and reconsider a claim because it
determines that the offered evidence is not \"new and material\", that
determination (but only that determination) would be subject to review
on appeal to this Court. If we find this determination \"arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law\" under 38 U.S.C. § 4061(a)(3)(A) (1988), a remand would be
required. By contrast, if the BVA determines that evidence is \"new and
material\", reopens and reconsiders the claim, and once again denies the
claim, that decision is subject to review on appeal by this Court based
upon the entire record because the decision of the BVA was required to
be based upon all evidence and material of record.

As an alternative to seeking to reopen a previously denied claim on the
basis of new and material evidence, a veteran might seek to have his
previously denied claim revised or reconsidered. *See* 38 C.F.R. §
3.105(a) (1990); *see also Bentley v. Derwinski*, U.S. Vet. App. No.
89-70 (Sept. 13, 1990), *appeal docketed*, 91-7020 (Fed. Cir. Dec. 6,
1990); 38 C.F.R. §19.185 (1990).

We now apply the two-step analysis required by §§ 4004(b) and 3008 to
the case at hand. The BVA found, as its sole finding of fact in the most
recent appeal, that \"the evidence submitted subsequent to \[the
November 1988\] decision \[of the BVA\] is not sufficient to alter the
factual basis to show that pyorrhea resulted in any extraction of any
tooth or teeth during the veteran\'s recognized military service.\"
*Emilio C. Manio*, loc. no. 931256, at 4 (BVA Nov. 20, 1989). The BVA
decision appears to have addressed the merits of appellant\'s claim. The
BVA stated that the issue was \"whether the evidence submitted *in
connection with the reopened claim* establishes a new factual basis
which would warrant the grant of service connection.\" *Id*. (emphasis
added). We conclude from this that the BVA found that the evidence
offered by appellant to reopen his claim was new and material; we do not
read the Secretary\'s brief as arguing to the contrary.

Examination of the November 20, 1989, BVA decision reveals that the BVA
erroneously failed to consider the evidence submitted by appellant in
the course of prior appeals. The BVA stated \"the evidence reported in
the prior Board decision will be briefly *discussed for clarification
purposes only*.\" *Emilio C. Manio*, loc. no. 931256, at 2 (BVA Nov. 20,
1989) (emphasis added). As we have stated, this would not be proper;
once appellant\'s claim was reopened based upon new and material
evidence, the BVA was obligated to consider all relevant evidence
offered by appellant. Because of this error the BVA\'s decision must be
set aside.

**Conclusion**

Although the veteran has presented compelling evidence, we believe that
the BVA should have the first opportunity to consider his claim in light
of all the evidence. *See Spencer v. Derwinski*, U.S. Vet. App. No.
90-62, slip op. at 5 (Jan. 18, 1991). Therefore, it is ordered that the
BVA decision denying service connection is set aside pursuant to 38
U.S.C. § 4061(a)(3) because it was not based upon the complete record,
as required by 38 U.S.C. §§ 3008 and 4004(b). The case is remanded to
the BVA for further proceedings consistent with this opinion. The BVA is
to consider appellant\'s claim in light of all the evidence and the
application of the benefit of the doubt doctrine, 38 U.S.C. § 3007(b),
to the issues presented.

*REMANDED*.