DEPARTMENT OF HOMELAND SECURITY 

BOARD FOR CORRECTION OF MILITARY RECORDS 

 

 
Application for the Correction of 
the Coast Guard Record of: 
 
                                                                                BCMR Docket No. 2005-173 
 
XXXXXX. 
xxxxxxxxx,  RM3/E-4 (former) 
   

 
Author:  Hale, D. 
 

FINAL DECISION 

 
 
This is a proceeding under the provisions of section 1552 of title 10 and section 
425 of title 14 of the United States Code.  It was docketed on September 30, 2005, upon 
the BCMR’s receipt of the applicant’s completed application for correction. 
 
 
members who were designated to serve as the Board in this case. 
 

This  final  decision,  dated  June  20,  2006,  is  signed  by  the  three  duly  appointed 

APPLICANT’S REQUEST AND ALLEGATIONS 

 
The  applicant,  a  former  radioman  (RM3;  pay  grade  E-4)  who  was  medically 
 
retired from the Coast Guard in 1995 due to a physical disability,  asked the Board to 
correct her record to show that the disability resulted from an injury or disease caused 
by an armed conflict or an instrumentality of war.  The applicant stated that she was 
medically retired due to post traumatic stress disorder (PTSD) and that her depression 
was the result of a terrorist attack on her Coast Guard station in April 1986.  She alleged 
that  the  Coast  Guard  failed  to  note  in  her  record  that  her  disability  resulted  from  an 
armed conflict or instrumentality of war, and that this error has caused the IRS to deem 
her disability payments as taxable and to seek back taxes, interest, and penalties.  She 
stated  that  IRS  regulations  provide  that  her  disability  payments  are  not  subject  to 
federal  tax  because  her  service-connected  disability  resulted  from  armed  conflict 
and/or a terrorist attack or military action.  
 

SUMMARY OF THE RECORD 

 

The  applicant  enlisted  in  the  Coast  Guard  on  May  31,  1983.    In April  1986  she 
was  serving  as  a  radioman  at  LORAN  (Long  Range  Aids  to  Navigation)  Station 

Lampedusa,  off  the  coast  of  Italy.    On  April  15,  1986,  the  Libyan  military  launched 
several Scud missiles against the applicant’s station in retaliation for the U.S. bombing 
of terrorist-related targets in Tripoli and Benghazi the day before.  However, the Libyan 
missiles fell considerably short of their target and plunged into the Mediterranean Sea.  
LORAN Lampedusa did not sustain any damage from the attack. 

 
 
Over the next couple of years, the patient sought medical attention on numerous 
occasions  for  complaints  of  depression  and  suicidal  ideation,  and  was  hospitalized 
twice  for  depression  in  1989.    On  December  18,  1989,  the  Coast  Guard  convened  an 
initial  medical  board  to  determine  the  applicant’s  fitness  for  continued  duty.    The 
medical  board  diagnosed  the  applicant  as  having  atypical  depression  with  mood 
incongruent  psychotic  features,  post  traumatic  stress  disorder,  chronic  and  recurrent, 
borderline  personality  disorder,  and  temporal  lobe  epilepsy.    The  medical  board 
determined that the applicant was not fit for duty because of a physical disability and 
that her case should be referred to the Central Physical Evaluation Board (CPEB).1 

 
In January 1990, the CPEB convened to determine if the applicant should remain 
on  active  duty  or  if  she  should  be  discharged  with  a  medical  disability.    The  CPEB 
determined  that  the  applicant  was  “not  fit  for  duty  due  to  major  depression  with 
psychotic  features  —  definite  impairment  of  social  and  industrial  adaptability.”    The 
CPEB noted that the applicant’s disability was the “proximate result of performance of 
active duty or inactive duty training or incurred in line of duty during war or national 
emergency.”  She was assigned a 30% disability rating and the CPEB recommended that 
she be placed on the temporary disabled retirement list (TDRL).2  On February 10, 1990, 
the applicant acknowledged and noted that she did not object to the CPEB’s findings 
and recommendations.   

 
The applicant was temporarily retired from the Coast Guard on April 10, 1990.  
Her DD Form 214 indicates that she received an honorable discharge.  She was placed 
on TDRL effective April 11, 1990.      

 
On November 2, 1995, the Coast Guard notified the applicant by letter that she 
had been found unfit to perform the duties of her rate by reason of permanent physical 
disability.    The  letter  stated  that  she  was  being  permanently  retired  from  the  Coast 
Guard effective April 11, 1995. 

                                                 
1 The Central Physical Evaluation Board is a permanently established administrative body convened to 
evaluate, on a records basis, the fitness for duty of active and reserve members and the fitness for duty of 
members on the temporary disabled retirement list (TDRL).  See Chapter 4.A.1. of the Physical Disability 
Evaluation System Manual (COMDTINST M1850.2C). 
2 Members whose disabilities have not stabilized to a degree where permanent disposition is warranted 
will be placed on the TDRL, provided they are otherwise qualified for physical disability retirement.  See 
Chapter 8.A.2. of the Physical Disability Evaluation System Manual (COMDTINST M1850.2B). 

 

VIEWS OF THE COAST GUARD 

 
On  February  9,  2005,  the  Judge  Advocate  General  (JAG)  of  the  Coast  Guard 
 
submitted  an  advisory  opinion  in  which  he  adopted  the  findings  of  the  Coast  Guard 
Personnel  Command  (CGPC)  and  recommended  that  the  Board  grant  the  applicant’s 
request.  The JAG stated that Coast Guard policy in effect at the time required the CPEB 
to make a finding in the applicant’s case “whether the disability resulted from an injury 
or disease which was caused by an armed conflict or an instrumentality of war.” 
 
 
The JAG further stated that the applicant’s record clearly supports a finding that 
her  disability  was  a  result  of  armed  conflict  or  instrumentality  of  war.    Therefore,  he 
recommended that the CPEB’s findings and recommended disposition be corrected to 
include this sentence: “The disability in item 10 resulted from an injury or disease that 
was caused by an armed conflict or an instrumentality of war.”  He also noted that the 
Coast Guard should correct the applicant’s “retired pay reporting transactions affected 
by this change.” 
 

APPLICANT’S RESPONSE TO THE VIEWS OF THE COAST GUARD 

 
 
On  February  15,  2006,  the  BCMR  sent  the  applicant  a  copy  of  the  views  of  the 
Coast Guard and invited her to respond within 30 days.  The applicant responded on 
February 23, 2006, and did not object to the Coast Guard’s recommendation. 
 

APPLICABLE REGULATIONS 

 

Chapter 2.C.3.a.3.f. of the Physical Disability Evaluation System (PDES) Manual 
 
(COMDINST M1850.2B), requires that when the CPEB makes a finding that an evaluee 
is unfit for continued duty by reason of physical disability, the CPEB shall also make a 
finding “whether the disability resulted from an injury or disease which was caused by 
an armed conflict or an instrumentality of war.”  
 

FINDINGS AND CONCLUSIONS 

 
 
The  Board  makes  the  following  findings  and  conclusions  on  the  basis  of  the 
applicant's military record and submissions, the Coast Guard's submissions, and appli-
cable law: 
 

The  Board  has  jurisdiction  concerning  this  matter  pursuant  to  10  U.S.C. 

1. 
§ 1552.   
 

2. 

 The  applicant  requested  an  oral  hearing  before  the  Board.    The  Chair, 
acting pursuant to 33 C.F.R. § 52.51, denied the request and recommended disposition 
of the case without a hearing.  The Board concurs in that recommendation. 
 

3. 

An application to the Board must be filed within three years of when the 
applicant discovers the alleged error in her record.  10 U.S.C. § 1552(b).  The applicant 
was permanently retired from the Coast Guard on April 11, 1995, and started receiving 
disability  payments  shortly  thereafter.    Although  the  alleged  error  in  her  record  was 
present when she accepted the CPEB’s findings on February 10, 1990, she alleged that 
she did not discover the error until the IRS contacted her in 2005 demanding back taxes, 
interest,  and  penalties  on  her  disability  payments.    Thus,  her  application  was  timely 
because she did not discover the error until 2005.   
 

4. 

The applicant alleged that the CPEB failed to include in its findings that 
her disabling condition was caused by an armed conflict or an instrumentality of war.  
She  further  alleged  that  this  error,  in  turn,  caused  the  IRS  to  deem  her  disability 
payments as taxable and to seek back taxes, interest, and penalties from her.  The Board 
finds  that  the  CPEB  indeed  failed  to  include  in  its  findings  whether  the  applicant’s 
injury  resulted  from  an  armed  conflict  or  an  instrumentality  of  war.    Pursuant  to 
Chapter 2.C.3.a.3.f. of the PDES Manual,  when the CPEB found the applicant unfit to 
perform her duties and determined that she should be medically discharged, they were 
required to include a finding that stated “whether the disability resulted from an injury 
or disease which was caused by an armed conflict or an instrumentality of war.”  The 
CPEB failed to make the finding as required by Chapter 2.C.3.a.f. of the PDES Manual.   

 
5. 

The  JAG  and  CGPC  stated  that  the  applicant’s  disability  was  “directly 
attributed  to  the  conflict  that  occurred  while  she  was  assigned  to  LORAN  Station 
Lampedusa, Italy.”  The applicant’s medical records support this conclusion.  Therefore, 
the Board finds that the CPEB’s report failed to include a finding that the applicant’s 
disability resulted from an injury or disease which was caused by an armed conflict or 
an instrumentality of war. 

 
6. 

The applicant is entitled to the relief requested, including the issuance of 
change to the CPEB’s Findings and Recommended Disposition (CGHQ-4808) to include 
“The disability in item 10 resulted from an injury or disease which was caused by an 
armed  conflict  or  an  instrumentality  of  war.”    In  addition,  the  Coast  Guard  should 
ensure that corresponding corrections are made to its retired pay reporting transactions.  
 

 
 
 

[ORDER AND SIGNATURES APPEAR BELOW]

 
ORDER 

 

The application of  former RM3 xxxxxxxxxxxxxxxxxxxxxx, USCG, for correction 

of her military record is granted as follows: 

 
The Coast Guard shall correct her record by changing the CPEB’s Findings and 
Recommended Disposition (CGHQ-4808) to include: “The disability in item 10 resulted 
from an injury or disease which was caused by an armed conflict or an instrumentality 
of  war.”    The  Coast  Guard  shall  also  correct  her  retired  pay  reporting  transactions 
affected by this order.  The Coast Guard shall ensure that a copy of the changes is sent 
to her. 
 

 
 

 
 

 
 
 

 
 

 
 

 
 

 
 
 

 
 

 
 

 
 

 
 
 

 
 

 
 

 
 

 
 
 

 
 

 
 

 
 

 
 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 George J. Jordan  

 

 

 
  Adrian Sevier 

 

 

 

 
 Kenneth Walton