## Facts

- Ronald W. Wagner served on active duty in the U.S. Navy from 1964 to 1968.
- His entrance examination listed no right-knee defects, infirmities, or disorders.
- During service, Wagner repeatedly reported right-knee pain and reduced mobility.
- Service records included Wagner’s statements that he injured his right knee playing high school football before enlistment.
- Other service entries described in-service knee trauma and symptoms, including a 1964 blow to the knee and 1966 episodes described as dislocation.
- In 1995, Wagner sought disability benefits for a right-knee disorder, asserting service incurrence and, alternatively, aggravation during service.

## Issues

1. When no condition is noted at entry, does 38 U.S.C. § 1111 require the government to rebut the presumption of soundness by clear and unmistakable evidence of both preexistence and no in-service aggravation?
2. Is VA’s burden satisfied by showing only preexistence and then shifting the burden to the veteran to prove aggravation?

## Decision

- The Federal Circuit held that the lower tribunal applied the wrong legal standard under 38 U.S.C. § 1111.
- When no condition is noted on entry, the government must rebut the presumption of soundness by clear and unmistakable evidence that the condition both preexisted service and was not aggravated by service.
- The court vacated the judgment and remanded for reconsideration under the correct two-prong standard.
- The court held 38 C.F.R. § 3.304(b) invalid to the extent it permitted rebuttal of § 1111’s presumption without clear and unmistakable evidence of no aggravation.

## Legal Principles

- If a condition is not noted upon entry, the veteran is presumed sound under 38 U.S.C. § 1111.
- To rebut that presumption, the government bears the burden to prove by clear and unmistakable evidence both:
  - the disease or injury existed prior to service; and
  - the disease or injury was not aggravated by service.
- The government may establish the “no aggravation” prong by clear and unmistakable evidence that:
  - there was no increase in disability during service; or
  - any increase was due to the natural progress of the preexisting condition.
- If the government fails to rebut § 1111’s presumption, the claim proceeds as one for service incurrence, and no deduction is made for any pre-service level of disability if benefits are awarded.
- Section 1153’s “increase in disability” framework governs aggravation when a condition is noted at entry; it does not reduce the government’s two-prong burden under § 1111 when nothing is noted at entry.

## Conclusion

The Federal Circuit required VA, when an entrance exam notes no defect, to rebut the presumption of soundness only by clear and unmistakable evidence of both preexistence and lack of in-service aggravation, vacating and remanding because the lower tribunal treated preexistence as sufficient without the required no-aggravation showing.


Wagner v. Principi, 370 F.3d 1089 (Fed. Cir. 2004)