Lile v. McDonough

Argued January 11, 2024

On Appeal from the Board of Veterans' Appeals

Melissa Hendricks, with whom Glenn Bergmann and Michal Leah Kanovsky were on the brief, all of Rockville, Maryland, for the appellant.

Jennifer K. Hamel, with whom Richard J. Hipolit, Deputy General Counsel; Mary Ann Flynn, Chief Counsel; and Drew A. Silow, Deputy Chief Counsel, were on the brief, all of Washington, D.C., for the appellee.

Before PIETSCH, ALLEN, and LAURER, Judges.

ALLEN, Judge:

This case sits at the crossroads of veterans law and military law. Appellant Jeffery K. Lile seeks basic entitlement to VA benefits by proving his status as a veteran. What stands in appellant's way is a July 15, 2021, Board of Veterans' Appeals (Board) decision in which the Board found that (1) he has no creditable service upon which to warrant basic entitlement to VA benefits because the Army discharged him from service as a result of a voided enlistment based on fraud and (2) his voided service is equivalent to a dishonorable discharge.^[1]

As we discuss, when appellant enlisted in the Army, he denied having been convicted of any crime and, in fact, disclaimed any involvement with civilian criminal courts and law enforcement.^[2] But these representations proved untrue. During his service, the Federal Bureau of Investigation (FBI) informed Army officials that appellant had been convicted of two crimes.^[3]Thereafter, the Army released appellant from its custody and control due to fraudulent entry.^[4]

Appellant eventually applied for VA benefits, leading to the Board decision on appeal. The Board found that a "discharge for concealment of a conviction by [a] civil court which would have prevented enlistment will be held to be under dishonorable conditions, and therefore a bar to VA benefits."^[5] The Board ultimately denied appellant's claim after finding that he had "no creditable service for VA benefits purposes."^[6]

This panel was convened to address how appellant's voided enlistment affects his eligibility for Title 38 benefits. Neither our Court nor the United States Court of Appeals for the Federal Circuit has had occasion to explore that question in a precedential decision. This lack of judicial attention perhaps explains the defects we discuss below in the Board's assessment of appellant's eligibility for VA benefits. And it may also explain why the Secretary's defense of the Board's eligibility assessment bears no resemblance to the Board's reasoning.

To summarize what follows, we hold that, while VA is bound by a service department's act of voiding an enlistment as well as its determination of the dates of a person's entry and separation, VA must conduct an independent assessment of whether a claimant subject to a voided enlistment is eligible for VA benefits. Specifically, VA must determine benefits eligibility by applying 38 C.F.R. § 3.14, most significantly subsections (a) and (b). If VA determines that a claimant's voided enlistment falls under subsection (b), its work is done because such a claimant is categorically not eligible for benefits under the regulation. In contrast, if VA determines that a claimant's voided enlistment comes within the ambit of subsection (a), then VA must proceed to assess the character of the claimant's service (assuming the service department left the period of service subject to the void enlistment uncharacterized, as should be the norm in a voided enlistment) and whether it bars entitlement to benefits under the appropriate provisions of 38 C.F.R. § 3.12.^[7]

It does not appear that the Board approached the question of appellant's eligibility using the correct legal framework. At a minimum, the Board's analysis is unclear, frustrating judicial review. So, we will set aside the Board decision on appeal and remand this matter for the Board to consider appellant's eligibility for benefits under the law as we have described.

I. BACKGROUND

A clear timeline of the procedural and factual history will help frame this matter. Appellant enlisted in the United States Army on September 24, 1979. ^[8] On his enlistment documents, appellant initialed under "no" in response to a question about whether he had "ever been arrested, charged, cited, (including traffic violations) or held by any law enforcement or juvenile authorities in the United States or in a foreign country regardless of whether the citation or charge was dropped or dismissed or you were found not guilty."^[9] Appellant also answered "no" when asked, as "a result of being arrested, charged, cited, or held by law-enforcement or juvenile authorities, have you ever been convicted, fined, or forfeited bond . . .?"^[10] He then handwrote "I claim no other involvement with the police."^[11]

In November 1979, the FBI, after conducting a background check, reported to the Army that appellant had been convicted of two crimes before he enlisted, larceny and breaching the peace.^[12] In January 1980, appellant received two letters of commendation from his command.^[13]He maintains that he was initially recommended for retention. ^[14] Despite the letters of commendation, in March 1980, appellant's commander recommended him to be "eliminated from service" for fraudulent entry because, since February 1980, appellant had "not demonstrated a desire to remain in the Army. Through demonstrated poor attitude, lack of motivation, and self-discipline, [appellant] has succeeded in negating all previous high recommendations toward a

possible retention in the Army."^[15] The commander further stated that appellant's "performance has rapidly declined since originally recommended for retention in the [A]rmy." ^[16] The rest of appellant's command recommended elimination from service by voidance of the enlistment contract.^[17]

On April 11, 1980, the Army released appellant from its custody and control due to fraudulent entry.^[18] Appellant signed a statement acknowledging that the basis of the separation was for fraudulent entry and that he understood "that[ ] if I am being considered for separation for fraudulent entry, my enlistment may be voided under certain circumstances."^[19] Appellant's DD-214 shows "00" for "net active service" for the period from September 1979 to April 1980 (as shown in the following excerpt of item 12 from the DD-214), and his character of discharge is "uncharacterized."^[20]

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In the years following his separation, appellant made multiple attempts to amend his discharge documents with the Department of the Army, specifically in July 1998, March 1993, January 1999, and October 2015, but none succeeded.^[21] In June 2016, appellant filed a claim for VA benefits seeking service connection for depression/anxiety, bilateral hearing loss, and tinnitus. ^[22] In response, VA sent appellant a letter stating that his military service was not honorable, but that he could be eligible for benefits so long as his service was not "dishonorable."^[23]

In February 2017, the VA regional office (RO) found that appellant's service was not honorable.^[24]It further found that under 38 C.F.R. § 3.14(b) "the evidence, including facts and circumstances, shows that [appellant's] enlistment has been voided by the service department, thus a statutory bar to benefits is established," but it assessed none of the facts leading to the void enlistment when rendering that finding. ^[25] In June 2017, appellant submitted a Notice of Disagreement with the February 2017 RO decision.^[26]

Appellant perfected his agency appeal in February 2018 and explained that he admitted his convictions to the army recruiter, that he entered service quickly, and that when he was accused of fraudulent entry, he tried to fight it but "was getting depressed and suicidal from the time it took to get this settled[.]"^[27]

In May 2021, appellant participated in a Board hearing in which he testified about his past convictions, that he was convicted of misdemeanors, that he informed his recruiter of his criminal history, and that he simply followed his recruiter's instructions when he did not list the convictions on his enlistment forms.^[28] He also stated that he believed his service was honorable, that he received letters of commendation, but that once he was cited for fraudulent entry, he was only assigned the most miserable jobs.^[29]

The Board issued the decision on appeal in July 2021.^[30] The Board cited 38 C.F.R. §§ 3.12(k)(2) and 3.14(a)-(b) and reasoned that a "discharge for concealment of a conviction by [a] civil court which would have prevented enlistment will be held to be under dishonorable conditions, and therefore a bar to VA benefits."^[31] It then found that, because appellant would have been prevented from enlisting if he had not fraudulently concealed the civil court convictions, the service is void and equivalent to a dishonorable discharge.^[32] Ultimately, the Board denied benefits on the grounds that "appellant has no creditable service for VA benefits purposes" and could not attain veteran status for the purpose of establishing eligibility for VA benefits. ^[33] This appeal followed.

II. ANALYSIS

The threshold matter in any VA benefits claim is the claimant's basic eligibility. Basic eligibility is determined by proving "veteran" status.^[34] A claimant is a veteran if he or she served in the active military, naval, air, or space service, and was discharged or released from service under conditions other than dishonorable.^[35] Whether a claimant meets veteran status is a finding of fact we review for clear error.^[36] Of course, we review legal questions de novo.^[37]

For all its findings on material issues of fact and law, the Board must support its determinations with an adequate statement of reasons or bases that...