Perciavalle: CUE, No Change of Law and Pyramiding

Perciavalle v. Wilkie, Case Number 17-3766, decided September 27, 2019 considers CUE and the prohibition on pyramiding in the context of knee disabilities.

In 1966 the veteran was service connected for a left knee injury and granted a rating of 10% under DC 5259, which covers removal of cartilage from the knee.  In 1971 he sought an increase but was denied and did not appeal.  In 2015, he filed a motion to revise the 1971 decision based on CUE.  He argued he should have been rated

under DC 5257 for slight instability of the knee and separately under DC 5003-5260 for limitation of motion of flexion and discomfort (pain) secondary to arthritis.   Id. at *3.  H explained that an x-ray report obtained during a 1971 VA examination clearly indicated arthritis in his left knee that decreased his range of motion and other evidence in 1971 showed instability.

VA denied the CUE motion stating in 1971 a policy was not in place allowing separate ratings for instability and limited motion. 

Now for some background, ordinarily different ratings for the same disability are not allowed as that would constitute pyramiding (awarding compensation for the same impairment under various diagnostic codes).  However, in the case of Esteban v. Brown, 6 Vet.App. 259 (1994), the Veteran’s Court “recognized that separate ratings were permissible for different diagnoses of the same disability as long as the conditions diagnosed shared no symptomology.”  Id. at *2.  So, separate ratings under different diagnostic codes can be awarded for the same disability if “none of the symptomatology for any one of the conditions was duplicative of or overlapping with the symptomatology of the other [diagnostic code ratings].”  Id. 

Three years after Estaban, the “VA’s General Counsel issued a guidance opinion specifically interpreting the ratings schedule as allowing separate ratings for the conditions at issue here—arthritis and instability in the same knee. VA Gen. Coun. Prec. 23-97 (July 1, 1997).”  Id.   The Court then explained:

The agency determined that, since "the plain terms of DC 5257 and 5003 suggest that those codes apply either to different disabilities or to different manifestations of the same disability, the evaluation of knee dysfunction under both codes would not amount to pyramiding under section 4.14." Id. VA recognized that it was the first time the agency assumed an official position on the matter, as the opinion acknowledged that it was aware "of no formal position taken by the Veterans Benefits Administration on this issue" before then.

Id. at*3.

Turning back to Perciavalle, the Board found the veteran’s CUE argument foreclosed by the existence of 38 C.F.R. Section 20.1403(c), which states CUE cannot be premised on a change in the interpretation of a statute or regulation.  The Board focused on the anti-pyramiding regulation and a finding that that not until Esteban was § 4.14 interpreted to permit separate ratings for distinct, non-overlapping symptomatology of the same underlying injury. It also found that VA did not issue its General Counsel opinion permitting separate ratings for arthritis and instability until 1997.

The Court reviewed the Board’s determinations de novo and pointed out that the VA’s General Counsel opinion in 1997 found no formal position had previously been taken by the VA.  The Court then determined  

our holding in Esteban cannot be deemed a change in interpretation. On its own terms, Esteban did not purport to introduce a definitive interpretation of § 4.14 but merely held that the Board's reading of the regulation was too broad in that case, as rating the veteran's condition under separate diagnostic codes did not constitute pyramiding under the plain language of the regulation. Esteban did not cite to any formal interpretation on VA's part that it repudiated but, citing to the factual findings in that case, merely noted earlier cases from this Court that read the regulation the same way when applied to similar facts. Esteban, 6 Vet.App. at 261 (discussing Fanning v. Brown, 4 Vet.App. 225 (1993)). In short, Esteban neither proposed an interpretation of a regulation nor cited any existing interpretation.

Id. at *6.

The Court found a change in interpretation necessarily requires the existence of a prior interpretation and because neither Esteban nor the 1997 VA General Counsel Opinion changed the law, Section 20.1403(c) is not implicated. 

The Court then considered whether the veteran was prejudiced by the Board’s opinion and determined yes.  The Court focused on a list of errors found in Simmons v. Wilkie, 30 Vet. App. 267, 277 (2018).  The Court found “the Board's error prejudicial in this case because the Board wrongly categorized his motion as precluded by law, thus preventing him from receiving a meaningful opportunity to participate in the adjudicative process.”  Id. at *8.

This is an important decision that upholds the boundaries of 38 C.F.R. 20.1403(c) and also puts into play many decisions involving knee disabilities where the evidence supported an instability rating many years ago, but it was denied in favor of simply a limited motion rating.

Decision by Judge Toth and joined in by Judges Bartley and Greenberg.

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