Background
William B. Peterson III, a former Army enlisted soldier, was administratively separated in June 2009 after mental-health episodes, including hospitalizations and a suicide attempt. His separation was characterized as based on a condition, not a disability, and he was never referred to the military Disability Evaluation System.
A May 28, 2009 separation examination documented depression, anxiety, and insomnia; assigned Peterson a psychiatric PULHES score of 3; and found him not qualified for service. The VA later rated him 100% disabled for major depressive disorder effective the day after his discharge. The Army Board for Correction of Military Records upgraded his discharge to honorable and changed the separation code, but denied disability-retirement relief.
The Court’s Holding
The court granted Peterson’s motion for partial judgment on the administrative record, vacated the ABCMR’s December 2025 denial of his disability-retirement claim, and remanded the matter to the Board. The court held that the claim was timely because, although Peterson knew or reasonably should have known of the severity and likely permanence of his condition at separation, the record did not show he knew that he could seek pre-separation disability-board review or that failing to do so would forfeit disability benefits.
The ABCMR acted arbitrarily and capriciously by failing to meaningfully consider the May 28, 2009 DD Form 2808. Under the applicable Army regulations, a finding that Peterson was not qualified for service could require referral to a Medical Evaluation Board and take precedence over administrative separation. The Board repeatedly misdated the examination as occurring in 2008 and did not address its psychiatric PULHES score or whether the report required Disability Evaluation System referral.
Key Takeaways
- A disability-retirement claim does not accrue at discharge under the Real exception absent evidence that the servicemember knew of the available board-review process and the consequence of not requesting it.
- An ABCMR decision must address material medical evidence bearing on whether a servicemember should have been referred to the disability-evaluation process.
- The ABCMR must reconsider whether Peterson is entitled to a retroactive DES or IDES referral and issue a written decision addressing the May 28, 2009 examination if it again denies relief.
Why It Matters
The decision reinforces that military correction boards must engage with contemporaneous separation medical records, particularly records indicating that a servicemember did not meet retention standards. A later VA disability rating alone does not determine military retirement eligibility, but the court found that the Board could not disregard evidence that may have triggered mandatory disability processing at the time of separation.
The court retained jurisdiction during the 120-day remand and stayed the case pending the ABCMR’s reconsideration.