UNITED STAT ES COURT OF AP P EALS FOR VETERANS CLAIMS

No. 99-413
T H O M A S E. B RUCE , A PP EL L ANT ,

V
. H ER SH EL W. G OBER , A C TI NG S EC RE T A RY O F V ET ER A N S A FF A I RS , A PPEL L EE
.

On Ap pe a l f ro m th e B oa

rd of Ve te ra ns ' Ap pe a ls
(De cided August 1, 2000 )

Thomas E. Bruce, pro se. Leigh A. Bradley , G e ne ra l Co un se l; Ro n G arv in , A ssi sta nt G e ne ra l Co un se l; Michae l A. Le on ar d , Deputy Assistant Gener al Counsel; and Richard Scott Ragan , all of Washington, D.C., wer e on the plea ding f

or the a ppellee.
Be fore KRAMER, FARL EY, and IVERS, Judges

. KRAMER, Judge : The appe llant, Thomas E. Br uce, a ppeals a Jul y

23, 1998, decision of the Boa rd of Ve tera

ns' Appea ls (BV A or B oard) denying e ntitleme n t t o waiver of re cover

y of an overpa y ment of VA c ompensation bene fits in the amount of $82,928.76. Record ( R.) at 2, 9. The appellant ha s filed an infor mal brief, a

nd the S ecr etar

y has filed a mot ion for summ ary aff irmance in l ie u o f a

br ie f. Th is appeal is time ly , a nd the Court

ha s juri sd ic tio n p ur su ant t o 3 8 U .S. C. § § 7 2 5 2 ( a ) an d

7 2 6 6 ( a )

. T h e C o u rtn o t e s t h a t , o nM ar c h 2 4 , 2 0 0 0 , t h i s a p p e a l w a s s t aye d

f o r 3 0 d a ys in acc ordanc e with In re Pane l Referrals in Pro Se Cases , 12 Vet.App. 316 ( 1999) (e n banc or der)

. For the re asons that follow, the Court will aff irm the dec ision of the Boa rd.

I. The appellant serve d on active duty from January

1969 to November

1970. See R. at 2. He was g rante d service connec tion for schizophrenic r eac tion, paranoid ty pe, in 1970 and ha s been r ated2

10 0% dis a

ble d f or that c on dit ion

sin c e 19 71 . R. at 13 , 15. I n 1 98 0, Con g re ss e na c te d 3 8 U .S. C. § 5313, which provide s limi tations on the pay men t o f co m p ensation t o a vete ran inc arc erated for conviction of a

felony

. See Pub. L . No. 96-385, § 504(a ), 94 Stat. 1528, 1534 (1980). In 1991 and 1992, a VA reg ional office (RO) re ceive d information re flec ting that the a ppellant had be en convicted of

a felony and, as a result, had been continuously incar cer ated in a penal institution si nce Aug ust 1987. R. at 22, 24, 54. Ba sed on that information, the RO retroa ctively reduc ed fr om 100% to 10% the appe llant's disability compensation, e ffe ctive on the 61st da y of his inc arc eration. R. at 32 -3 4; 6 0- 62 ; see 38 U.S .C. § 5 31 3( a )( 1) (A ) ( lim iti ngto 1 0% mon thl y pa y me nt o f d isa

bil ity compensation for veter an convic ted of fe lony and inca rce rate d in pe nal instit ution f or more than 60 day s). This ultimately

resulted in the c alculation of an over pay ment to the appellant in the amount of $82,928.76. See R. at 36-43, 51. After rec eiving notice of the overpa y ment, the appe llant submit ted to VA a r eque s t f o r waiver of re cover

y of that debt. R . at 56. I n support of his reque st, he asser ted that he ha d not been informed that his compe nsation "c ould be re duced be cause of beingincar cer ated f or a felony "; that his fa mil y ha d inf or me d VA of his inc arc e ra

tio n; a nd that r e c ov e ry

wo uld c re a te a fi na nc ia l ha rd sh ip b ec au s e h i s fi n an ci al re s o u rc es h adb ee nco mp l et el y d ep l et edas a r es u l to f t h e c ri m i n al p ro ce ed i n gs leading to his conviction. R. at 56- 57. A VA Commi ttee on W ai v er s an d C ompromises subsequently deter

mined that, even though a repor t of income re flec ted that the appe llant's e x penses exceede d his income, rec overy of the de bt would not cause ha rdshi p b ec au se the a

ppellant was "inc arc erated at go v er n m en t expense." R. at 65. The Committ ee f urther de termined that the

a pp e lla nt h a d " su bs tanti a l f a ult " in the c re a tio n of the ov e rp ay me nt a nd that w a ive r w ou ld r e su lt i n his unjust enric hment. R. at 65, 67. Consequently , the C ommitt ee denied his reque st for wa iver of

re c overy
. R. at 65 . T he a pp e lla nt a pp e a le d th a t de c isi on , a sse rt ingthat hi s f a mil y ha d ti me ly informed VAof hi s incarc eration and arguing that collection of the ove rpay ment would cre ate undue fi na nc ia l ha rd sh ip be c a

us e he did no t have the fi na nc ia l r e so ur c e s to re ta in a n atto rn e y to a ssi st i n appea ling his convic tion. R. at 73-76, 86-88. I n the B VA dec ision on appeal, the B oard initially deter mined that the over

pay ment had bee n proper ly cre ated ( R. at 5) and that " there was no fra ud, misrepre sentation, or bad faith on the par t of the [appell an t ] wi t h re s pect to cr eation of the overpa y ment at issue" (R. at 7). The Boa rd then3

c on sid e re d th e fa c tor s li ste d in 38 C.F.R. § 1.965(a) (1999) in orde r to deter mine whether

rec overy
wo uld be " a g a ins t th e pr inc ipl e s o f e qu ity and good consc ie nc e ." R. at 7. I n a dd re ssi ngtho se fac tors, the B oard f

ound that there was " no fault on the par t of the [appellant] in t he cr eation of the assessed ove rpay

ment" be cause it would not be reasonable "to ex pect [ the appe llant] to be awa re of the fa ct that his incar cer ation would result in a reduc tion of his c ompensation pay ments." R. at 7. The B VA also found that VA was not at fa ult in creating the ove rpay ment beca

use " it would have

cause d an undue bur den" to r equire VA to notify ever y veter an in re ceipt of c ompensation in 1980 that he or she "w ould have to report i ncar cer ation for a felony on the off c hance that he or she might then be or sometime later be incar cer ated f or a f elony ." R. at 8. The B VA fur ther c oncluded that

rec ov er y wo u l d not cre ate a n "undue financ ial hardship" on the appe llant, rea soning that "the [appellant] i s curr ently

incar cer ated; as suc h hi s basic ne cessities (i.e., f ood, shelter, c lothing) a

re pr ov ide d f

or b y th e corre c tio na l in sti tut ion , a nd any c oll e c tio n w ou ld n ot d e pr ive him of the se
nece ssities." R. at 8. As to the re mainder of the eleme nts in § 1.965(a), the B oard state d: As the [appellant] rece ived disability compensation to which he [was] not e ntitled (as a r e s u l to f h i s i n c ar c e r a t i o n ) , t h i s r e s u l t e d i nh i s u n j u s t e n r i c h m e n t

. A d d i t i o n a l l y, there is no evidence that the [ appellant] relinquished a valuable rig ht or incurr ed any leg al obligations resulting from relianc e on VA be nefits. Fur thermore , the evidenc e of re cord disclose s no other element of the standard of equity and g ood conscie nce which would persua de the Boar d that the Gover nment should waive its rig ht to the repa y ment of the a ssessed indebtedne ss. R. at 9. Ac c or din g ly , the B oa rd c on c lud e d tha t re c ov e ry of the ov e rp ay me nt w ou ld n ot b e a g a ins t equity and good conscience and thus denied entitlement to waiver. R. at 9. This appe al followed. On appeal, th e a

p p e ll an t c o n te n d s th a t V A w a s a t f a u lt in th e c r e a ti o no f

th e o v e r p ay me nt be c a us e VAdid

no t in fo rm

him a bo ut t he c ha ng e in law that pro vid e d tha t inc arc e ratio n w ou ld r e su lt in a re duction in his VA disability compensation or notify him that it was his responsibility to report his incarc eration to VA. Appellant' s I nformal Brief , Attachment at 1-3. Additionally , he ar g ues that the B oard e rre d in determining that rec overy of the overpa y ment would not cre ate a

n undue fina

ncial hardship. Id . at 3. I n that reg ard, he essentially asser ts that his basic necessities are not all provided for by the pena l insti tution because he is requir ed to pa y fo r such items as toiletries, medication, de nta l a pp oin tme nts , a

nd me dic a l a

ppoi ntm e nts and

tha t " wi tho ut t

he fi na nc ia l a id o f f

a mil y
me mbe rs " he wo uld

no t be a ble to o bta in " so me of the ne e de d ite ms [that] he de e ms a ne c e ssi ty to4

hi s s urv iv al i n s uch a su rro un di ng." Id . at 4-5. F inally , he conte nds that failure t o reimburse the g overnme nt would not r esult in his unjus t enrichme nt beca use there is no evidence "show ing w here or h ow [ he] may

hav e ben efi ted fro m t he o verp ay men t. " Id

. at 4. The Sec reta ry responds that the BV A dec ision should be affi rm ed b ecause it was made in acc ordanc e with applica ble laws a

nd regulations and bec ause the appellant has not ide ntified any err ors of fa ct or lawthat would war rant

rema nd or re versa l. Secre tary ' s Motion at 1.

II. Pur su ant t o 3 8 U .S. C. § 53 02 (a ), " [t]he re sh a ll b e no re c ov e ry of pa y me nts or ov e rp ay me nts . . . of an y b en ef

i ts under any

of the law s administered by the Secr etar

y whene ver the Secre tary det erm in es t hat reco very w o u l d be agai ns t eq ui ty andgoodcon sci ence. " See 38 C.F.R. §§ 1.962, 1. 96 3, 1. 96 5( a ) ( 19 99 ); se e als o 38 U.S.C. § 5302(c) (r ecove ry may not be w aived if there is " an indication of fr aud, misrepre sentation, or bad faith" ); 38 C.F.R. § 1.965(b) (1999). In deter mining whether rec overy would be aga inst equity and good conscience , the S ecr etar y is require d to consider the eleme nts set forth in 38 C.F.R. § 1.965(a) , which ar e not intended to b e al l i n cl u s i v e: (1) the fault of the de btor; (2) the ba lancingof fa ults between t h e d eb t o r and VA; ( 3) undue ha rdship; (4) whe ther the pur

pose of the e x isting bene fits would be def eate d; (5) unjust enrichm en t ; and (6 ) wh e the r the a

pp e lla nt c ha ng e d h is p os iti on

to h is d e tr ime nt. Se e Ri din gs v . B ro wn , 6 Vet.App. 54 4, 54 6 ( 19 94 ). De te rm ini ngwh e the r t he re wo uld

be " un du e ha

rd sh ip, " in tu rn , r e qu ir e s a det er m i n ati on as to " [w] hether collection would depr ive [the] debtor . . . of ba sic nec essities." 3 8 C. F

. R. § 1

. 9 6 5 ( a ) ( 3 )

. " Wa iv e r d e c is io n s , an d

th e r e v ie w o f

s u c h d e c is io n s b y

th e B V A , a re
su bje c t to re vie w b y

thi s Co ur

t to de te rm ine wh e the r t he statut ory st and ard

wa s a pp lie d in

acco rdanc e with the re g ulatory g uidance or whe ther the de cision was made in an ar bitrary or capr ici ou s m ann er." Smith ( Ba r b a r a ) v

. Derwinski , 1 Ve t.A

pp . 2 67 , 2 79 (1 99 1) ; see 38 U. S.C. § 7 26 1( a )( 3) (A ); Cul le n v. Br own , 5 Vet.App. 510, 512 ( 1993). The sc ope of r eview unde r the "a rbitrar y and ca pricious" standard is narr ow and doe s not permit the Court to substi tute its judgment for that of the B oard. Se e Kap lan v . B ro wn , 9 Vet.App. 116, 119 ( 1996). " I f the B oard a rticulates a satisfa ctory

explanation f

or its decision, including a rational connec tion between the fac ts found5

and th e cho ice mad e, t he C ou rtmu st affi rm ." J or da n v . B ro wn , 1 0 V e t.A

pp . 1 71 , 1 75 (1 99 7) ; see als o 38 U. S.C. § 7 10 4( d) (1 ); Gilbert v. De rwinski , 1 Vet.App. 49, 57 ( 1990). Be cause the appe llant, in his brief, raises arg uments only as t o the B oard' s consideration of fa ult , und ue ha rd sh ip, and

un jus t e nr ic hme nt, the Court wi ll c on fi ne its re vie w to issu e s re la te d to those fac tors. See Ford v. Gobe r , 1 0 V e t.A pp . 5 31 , 5 35 (1 99 7) ; Gr iv ois v . B ro wn , 6 Vet.App. 136, 138 (1994) ( issues or claims not argued on ap p ea l are deeme d abandone d); Bu c k lin ge r v . B ro wn , 5 Vet.App. 435, 436 ( 1993). On appe al, the appellant appea rs to express disagr eeme nt with the Boa rd' s determination that it would have bee n unduly burdensome for VA to notify ever y veter an in re ceipt of c ompensation in 1980 of the enac tment of 38 U.S.C. § 5313 and its fur ther deter mination that VAthere fore was not at fault in cre ation of the overpa y ment. R. at 8. H oweve r, the a ppellant has not pointed to any authority indicating that VA had a duty to provide such notification, nor is the Court awar e of a ny such duty

. Cf

. 38 U.S.C. § 7722(c) (Sec reta ry shall distribute full information to e ligible ve tera ns
r e g ar d i ng " a ll be ne

fit s a nd se rv ic e s" to w hic h th e y may be e nti tle d ( e mph a sis a dd e d) ); W e lls v. Principi , 3 Vet.App. 307, 309 ( 1992). F urther, the appellant ha s not pr ovided any other a rg ument that would support a finding of VA fault. Acc ording ly , the C ourt conclude s that the appe llant has not demonstrated that the B oard f ailed to p rovi de a satisfactory explanation for its conclusion reg ardingthe appor

tionment of fault in the pre sent ca se. The a ppellant also expresses disag ree ment with the Boa rd' s determination that re cover y of the over pay ment would not cre ate an undue hardship on the appellant. I n this reg ard, the Court notes that, prior to the B VA decision, the appe llant argued that his financ ial resour ces ha d been de pleted

a s a re su lt o f th e cr imi na l pr oc e e din g s le a din g to h is i nc arc e ra tio n; a rgue d th a t, d

ue to i na de qu a te funds, he ha d been f

orce d to appea l his conviction without l eg al re prese nt at i o n ; an d provided information reflecting that his expenses exceede d his income. R. at 29, 56-57, 65, 87. Althoug h the Bo ar d d i d n o tex p l i ci t l y

ad dre s s t h es e c o n t en t i o n s , t h e B o a rd 's d et er m i n at i o nt h at t h e ap p el l an t 's "ba sic nec essities (i

. e. , fo o d , shelter, c lothing) a re pr ovided for by

the cor rec tional insti tution"

nece ssarily

encompa sses an implicit determination that any of his claimed e x penditures we re not for "ba sic nec essities" a

nd that inadequate funds for such expenditures would not lead to a de privation of " basic necessities." 38 C.F.R. § 1.965(a) (3) (assessment of "[u]ndue hardship" element r equire s6

deter mi n at i o n as to " [w] hether collection would depr ive debtor . . . of basic ne cessities" ). Consequently , the Court conclude s that the Boa rd provided a

sufficie nt articulation of its rea soning in this reg ard. Th e a pp e lla nt f ur the r c on te nd s, fo r t

he fi rs t tim e on

a pp e a l, t hat w hil e inc arc e rate d h e mus t pay for items suc h as toiletries, medication, denta l appointments, and medica l appointments and that

" wi tho ut t he fi na nc ia l a id of fa

mil y me mbe rs " he wo uld

no t be a ble to o bta in s ome " ite ms h e de e ms
a ne c e ssi ty ." Ap pe lla

nt' s I nf or ma l B ri e f, Atta c hme nt a t 4- 5. Al tho ug h, un de r c e rt a in c ir c ums tanc e s, the Court would have jur isdiction to consider an argument r a i s e d f o r t h e f i r s t t i m e on a pp e a l ( see Ma gg itt v . W est , 202 F.3d 1370, 1377 ( Fe d. Cir. 2000)), the Court is prec luded by statute from i n c l u d i n g i n t h e r e c o r d

o na p p e a l an y evide nce t h at wa s n o tco n t ai n edi nt h e "r ec o rdo f p ro ce ed i n gs be fo re the Se c re tary and the B oa rd " (3 8 U .S. C. § 72 52 (b ); se e Cum by v . W est , 12 Vet.App. 363, 365 (1999); Rogozinski v. De rwinski , 1 Ve t.A pp
. 19 , 20 (1 99 0) ). He re , the a pp e lla nt' s state me nts in h is brief e ssentially

constitute an attempt to introduc e new evidenc e (r eg ardingthe nature and leve l of his purported e x penditures) in support of an a rg ument that he previously raised ( that rec overy

of the overpa y ment would deprive him of basic nec essities). See Ro bin e ttev . B ro wn , 8 Vet.App. 69, 78 (1995) ( definingthe t erm "evide nce" ). Thus, the Court will not consider this evidenc e in re ndering its decision. Howeve r, the Court notes that the appellant may be able to utiliz e stateme nts reg arding the natur e and le ve l of his e xpe nd iture s ( tog e the r w ithany c or ro bo ra tin g e vid e nc e ) t o d e mon str a te "ne w and mate rial evide nce" in connec tion with an attempt to rever se or modify the waiver decision under 38 C.F .R. § 1.969(a) ( 1999). Finally , as to the appellant' s assertion that the B oard e rre d in finding unjust enr ichment, the Court concludes that the Boa rd' s explanation in this re g ard, albeit brief, was satisfa ctory

. See R. at 9 ( " As the [ap pe lla

nt] r e c e ive d d isa

bil ity com pen satio n to wh ic h h e [wa s] no t e nti tle d ( a s a re su lt of his incar cer ation), this resulted in his unjust enrichment." ).

III . I n su m, the Court

ho lds that th e a

pp e lla nt h a s n ot d e mon str a te d th a t th e B oa rd fa ile d to articulate a satisfactory

explanati o n fo r i t s d ecision, and thus the Court ca nnot conclude that the7

B V A ' s d e n i a l o f w a i v e r w a s ar b i t r ar y , c a p r i c i o u s , an a

b u s e o f d i s c r e t i o n , o r o t h e r w i s e no t in

acc ordanc e with the law. A ccor dingly , the J uly 23, 1998, BV A dec ision is AFFI RMED.