Citation Nr: 1313113 Decision Date: 04/19/13 Archive Date: 05/02/13 DOCKET NO. 10-46 273 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in Cleveland, Ohio THE ISSUE Eligibility for payment of attorney fees from past-due benefits. ATTORNEY FOR THE BOARD T. Mainelli, Counsel INTRODUCTION The Veteran served on active duty from February 1985 to May 1986. The appellant is the Veteran's attorney. This appeal to the Board of Veterans' Appeals (Board) arose from an April 2010 administrative decision in which the RO found that the appellant was not eligible for direct payment of fees with respect to a November 2009 award of TDIU benefits for the Veteran. In April 2010, the appellant filed a notice of disagreement (NOD). A statement of the case (SOC) was issued in October 2010, and the appellant filed a substantive appeal (via a written statement and VA Form 9, Appeal to the Board of Veterans' Appeals) in November 2010. Regarding characterization of the issue on appeal, the appellant contends that the issue involves past due benefits stemming from an initial rating after successfully representing the Veteran from an adverse December 2006 RO rating decision denying service-connected benefits while the RO contends that the issue arises from a separate, new increased claim first addressed in a November 2009 rating decision. The Board addresses both arguments but has characterized the claim as listed on the title page more generically for ease of reference. FINDINGS OF FACT 1. The Veteran filed a petition to reopen a previously denied claim for service connection for an acquired psychiatric disorder on April 6, 2006. 2. In a December 1, 2006 rating decision, the RO denied the Veteran's petition to reopen the claim for service connection for an acquired psychiatric disorder. 3. On December 27, 2006, the Veteran's then representative filed an NOD with respect to the RO's April 2006 rating decision. 4. On June 25, 2007, the appellant entered an appearance in the case, and perfected an appeal of the psychiatric disorder claim to the Board. 5. On December 17, 2007, the Veteran's attorney asserted that the Veteran was entitled to service connection for her psychiatric disability was well as a TDIU rating. 6. In a November 7, 2008 decision, the Board granted the Veteran's petition to reopen her claim for service connection for an acquired psychiatric disorder, and remanded the claim on the merits for further evidentiary development. 7. In a March 2009 rating, the RO decision awarded service connection for bipolar disorder, and assigned an initial 70 percent rating, effective April 6, 2006. 8. A May 12, 2009 RO administrative decision awarded the appellant attorney fees in the amount of $7,708.59 for representation in the service connection claim. 9. In July 2009, the appellant filed an NOD on behalf of the Veteran regarding the RO's failure to award a TDIU rating in the March 2009 rating decision. 10. In a November 3, 2009 rating decision, the RO awarded the Veteran TDIU benefits effective December 17, 2007. 11. The appellant is entitled to a supplemental payment for his representation of the Veteran in obtaining a higher initial rating for bipolar disorder effective from the date of the final Board decision on November 7, 2008, to the date of RO decision on November 3, 2009. CONCLUSION OF LAW The criteria for eligibility for payment of attorney fees from past-due benefits-specifically, a supplemental payment for the TDIU award effective from the date of the final Board decision on November 7, 2008, to the date of RO decision on November 3, 2009-are met. 38 U.S.C.A. § 5904(a) (West 2002); 38 C.F.R. § 20.609 (applicable to claims for which an NOD is filed prior to June 20, 2007). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. VA's Duties to Notify and Assist The Board notes that the Veterans Claims Assistance Act of 2000 (VCAA) and implementing regulations impose obligations on VA to provide claimants with notice and assistance. 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2012); 38 C.F.R §§ 3.102, 3.156(a), 3.159, 3.326(a) (2012). However, the United States Court of Appeals for Veterans Claims (Court) has held that VA's duties to notify and assist do not apply to cases where, as in this case, the applicant is not seeking benefits under Chapter 51 of Title 38 of the United States Code, but is seeking instead a decision regarding how benefits will be distributed under another Chapter. See Sims v. Nicholson, 19 Vet. App. 453, 456 (2006). Moreover, the VCAA does not affect matters on appeal when the issue is limited to statutory interpretation. See Mason v. Principi, 16 Vet. App. 129 (2002); Dela Cruz v. Principi, 15 Vet. App. 143 (2001); see also VAOPGCPREC 2-2004 (2004) (holding that VCAA notice was not required where evidence could not establish entitlement to the benefit claimed). As explained further below, the appellant's claim primarily involves an interpretation of the law to undisputed facts; thus, there are no VCAA duties applicable to this claim. Moreover, as the Board is granting the benefit sought to the fullest extent allowed by law, there is no prejudice to the appellant in the Board proceeding to a decision, at this juncture. II. Applicable Legal Authority The appellant contends that he is entitled to payment of attorney fees based on an RO award of a TDIU in a November 2009 RO rating decision. He contends that the TDIU claim was pending at the time of a March 2009 rating decision, in which the RO awarded service connection for bipolar disorder and assigned an initial 70 percent rating ,effective April 6, 2006. It is contended that the TDIU award was part and parcel of the initial rating and, thus, a past due benefit on a claim on which he had represented the Veteran before the Board. The relevant legal authority provides that a claimant may have attorney representation for the prosecution of claims for VA benefits. 38 U.S.C.A. § 5904(a) (West 2002). Pursuant to the Veterans Benefits, Health Care, and Information Technology Act of 2006 (P.L. 109-461), the statute governing the circumstances under which attorney fees may be charged was amended. The amended statute permits attorneys-at-law and agents to charge fees for representation after an agency of original jurisdiction has issued a decision on a claim or claims, and an NOD has been filed with respect to that decision on or after June 20, 2007. In May 2008, VA revised and renumbered the regulatory provisions governing attorney fee agreements and payment of attorney fees out of past-due VA disability compensation benefits. See 73 Fed. Reg. 29875 (May 22, 2008) codified at 38 C.F.R. §§ 14.636, 14.637 (2012). The revised regulations generally are applicable to cases where an NOD is filed with respect to a challenged VA decision on, or after, June 20, 2007. Id. Here, the appellant contends that the challenged VA decision at issue concerns a December 2006 rating decision in which the RO denied the Veteran's petition to reopen a claim of entitlement to service connection for bipolar disorder. An NOD with this decision was filed on December 27, 2006 by the Disabled American Veterans (the recognized representative at that time), prior to the appellant entering an appearance in this case in June 2007. As the NOD with the December 2006 RO denial was filed prior to June 20, 2007, the prior versions of 38 U.S.C.A. § 5904 and 38 C.F.R. § 20.609 apply. Under applicable legal authority, an attorney may charge a fee for such representation only if specified statutory and regulatory criteria are satisfied. 38 U.S.C.A. §§ 5904(c), (d) (West 2002); 38 C.F.R. §§ 20.609(c), (g), and (h) (applicable to claims for which an NOD is filed prior to June 20, 2007). Under 38 U.S.C.A. § 5904(c)(1) (West 2002), a fee may not be charged, allowed, or paid for services of an attorney with respect to services provided before the date on which the Board first makes a final decision in the case. Such a fee may be charged, allowed, or paid in the case of services provided after such date only if an attorney is retained with respect to such case before the end of the one-year period beginning on that date. The regulation implementing 38 U.S.C.A. § 5904(c)(1), found at 38 C.F.R. § 20.609(c) (applicable to claims where an NOD is filed prior to June 20, 2007), provided, in pertinent part, that an attorney may charge fees only if the following conditions have been met: (1) a final decision had been promulgated by the Board with respect to the issue or issues involved; and (2) the attorney was retained not later than one year following the date on which that Board decision was promulgated, i.e., a qualifying fee agreement. 38 C.F.R. § 20.609(c) (2006); see also In re Mason, 13 Vet. App. 79, 83-86 (1999). Subject to the requirements set forth in § 20.609(c), a claimant and an attorney may enter into a fee agreement providing that payment for the services of the attorney will be made directly to the attorney by VA out of any past-due benefits awarded as a result of a successful appeal to the Board or an appellate court or as a result of a reopened claim before VA following a prior denial of such benefits by the Board or an appellate court. Such an agreement will be honored by VA only if the following conditions are met: (1) the total fee payable (excluding expenses) does not exceed 20 percent of the total amount of the past-due benefits awarded; (2) the amount of the fee is contingent on whether or not the claim is resolved in a manner favorable to the claimant or appellant; and (3) the award of past-due benefits results in a cash payment to a claimant or an appellant from which the fee may be deducted. See 38 C.F.R. § 20.609(h) (2006). Past-due benefits are defined as a nonrecurring payment resulting from a benefit, or benefits, granted on appeal or awarded on the basis of a claim reopened after a denial by the Board or the lump sum payment that represents the total amount of recurring cash payments which accrued between the effective date of the award, as determined by applicable laws and regulations, and the date of the grant of the benefit by the agency of original jurisdiction, the Board, or an appellate court. Id. When the benefit granted on appeal, or as the result of the reopened claim, is service connection for a disability, the "past-due benefits" will be based on the initial disability rating assigned by the agency of original jurisdiction following the award of service connection. The sum will equal the payments accruing from the effective date of the award to the date of the initial disability rating decision. If a higher evaluation is subsequently granted as the result of an appeal of the disability evaluation initially assigned by the agency of original jurisdiction, and if the attorney represents the claimant or appellant in that phase of the claim, the attorney will be paid a supplemental payment based upon the increase granted on appeal, to the extent that the increased amount of disability is found to have existed between the initial effective date of the award following the grant of service connection and the date of the rating action implementing the appellate decision granting the increase. Id. III. Background and Analysis The Veteran sought to reopen a previously denied claim for service connection for an acquired psychiatric disorder on April 6, 2006. The RO denied the petition to reopen in a December 1, 2006 rating decision. After receipt of additional evidence, the RO again denied the petition to reopen in a December 18, 2006 rating decision. On December 27, 2006, the Veteran filed an NOD with respect to the RO's denial of her request to reopen her claim for service connection for an acquired psychiatric disorder. At that time, the Veteran was represented by the Disabled American Veterans. On June 25, 2007, the RO received a letter from the appellant notifying the RO of his representation of the Veteran. The appellant also filed a properly completed VA Form 21-22a (Appointment of Individual as Claimant's Representative). He reported that he had been advised by the Veteran of previously filing an NOD, but requested that his letter be accepted as an NOD in the event an NOD had not been submitted. In September 2007, the RO furnished the Veteran and the appellant a Statement of the Case (SOC). In November 2007, the appellant perfected the Veteran's appeal to the Board with the filing of a VA Form 9 (Appeal to Board of Veterans' Appeals) and notice that the appellant elected to pursue the appeal through the traditional appeal process. On December 17, 2007, the Veteran's attorney submitted to the Board a private medical opinion opining that the Veteran's bipolar disorder first manifested in service. The Veteran's attorney argued that this opinion constituted new and material evidence sufficient to reopen and grant the claim. In addition, the Veteran's attorney provided the following argument: In addition, Dr. [M] finds that claimant satisfies the 70 % diagnostic code for her bipolar condition. Thus, I would request that a finding of disability at that level be entered. Furthermore, since she has been unable to work due to her service connected bi-polar disorder, total disability due to individual unemployability benefits should be awarded and claimant granted a 100 % rating as a result. By means of a November 7, 2008 decision, the Board granted the Veteran's petition to reopen her claim for service connection for an acquired psychiatric disorder, and remanded the claim on the merits for further evidentiary development. In December 2008, the appellant filed his attorney fee agreement with the Veteran which, inter alia, reflected agreement that the appellant was to receive a 20 percent fee for past due benefits. The appellant certified that a copy of the attorney fee agreement was sent to the Office of General Counsel. The additional evidentiary development included obtaining medical and legal documents pertaining to the Veteran's award of disability benefits with the Social Security Administration (SSA). The Veteran had been declared disabled as of June 27, 2002 due to "AFFECTIVE DISORDERS." A February 2009 VA examiner opined that it was at least as likely as not that the Veteran's bipolar disorder had its onset in service. It was commented that the Veteran had reportedly not held a job after military service for more than a couple of months due to her bipolar disorder, and that her bipolar disorder was causing serious social and occupational impairments. By means of a rating decision dated March 2009, the RO awarded service connection for bipolar disorder, and assigned an initial 70 percent rating, effective April 6, 2006. The RO informed the Veteran and the appellant that this decision was considered a full grant of all benefits sought on appeal, and that any disagreement with the March 2009 award of benefits must be initiated with a new NOD to begin a new appeal. In May 2009, the appellant submitted to the RO an affidavit from the Veteran asserting that she had no objection to VA's withholding of the 20 percent fee specified in the attorney fee agreement, and that she would not file a protest or appeal to an attorney fee withholding in that amount. In an administrative decision dated May 12, 2009, the RO determined that the Veteran was due $39,542.99 of past due benefits based upon the award of a 70 percent service-connected rating effective April 6, 2006 to the date of the RO's award decision dated March 16, 2009. The RO determined that the appellant met the criteria under 38 U.S.C.A. § 5904 and 38 C.F.R. § 20.609 for an award of attorney fees in the amount of $7,708.59. In July 2009, the appellant filed an NOD on behalf of the Veteran regarding the RO's failure to award a TDIU rating in the March 2009 rating decision. It was noted that, in the December 17, 2007 appeal to the Board, a TDIU rating was specifically requested. At that time, a VA Form 21-8940 (Veteran's Application for Increased Compensation Based on Unemployability) was submitted. In a decision dated November 3, 2009, the RO awarded a TDIU, effective December 17, 2007. In an administrative decision dated April 13, 2010, the RO determined that the appellant was not entitled to payment of attorney fees as "[t]he issue of entitlement to individual unemployability was not on appeal at the time the decision was made." The appellant has appealed this determination. Having reviewed the record in light of the above-cited legal authority, the Board concludes that the appellant is entitled to attorney fees from past-due benefits stemming from the RO's December 2006 denial of the Veteran's petition to reopen a service connection claim for bipolar disorder. The revised regulations governing payment of attorney fees are not applicable here because the relevant NOD was filed on December 27, 2006. See 73 Fed. Reg. 29875 (May 22, 2008) codified at 38 C.F.R. §§ 14.636, 14.637 (2012). As such, the former VA statute and regulations governing attorney fees are applicable. The RO has awarded attorney fees for the award of a 70 percent rating for bipolar disorder in the March 2009 rating decision. The Board finds that this determination is correct to the extent that the appellant was entitled to payment of past due benefits for services provided after the Board's November 7, 2008 decision. Under 38 U.S.C.A. § 5904(c)(1) (West 2002), a fee may not be charged, allowed, or paid for services of an attorney with respect to services provided before the date on which the Board first makes a final decision in the case. Notably, the Board's reopening of the acquired psychiatric disorder claim is deemed a "final" decision for purposes of 38 U.S.C.A. § 5904 and 38 C.F.R. § 20.609. See Stanley v. Principi, 283 F.3d. 1350 (Fed. Cir. 2002). In April 2010, the Veteran's attorney filed an NOD with respect to the RO's November 2009 rating decision in which the RO awarded an initial 70 percent disability rating. This is a downstream element of a service connection claim. Grantham v. Brown, 114 F.3d 1156, 1158-59 (Fed. Cir. 1997). The appellant asserted that the Veteran was entitled to TDIU, which is a component of the initial rating claim. Rice v. Shinseki, 22 Vet. App. 447 (2009). On November 3, 2009, the RO awarded a TDIU, effective December 17, 2007, which reflects the RO's assessment that this claim had been reasonably raised prior to March 2009 rating decision awarding service connection for bipolar disorder. In other words, a TDIU had been a component of the initial rating claim and not a new, increased rating claim. The regulation defining "past-due benefits" specifically states that an attorney will be paid a supplemental payment if he/she represents a claimant in seeking a higher initial disability evaluation. 38 C.F.R. § 20.609(h)(3)(i) (applicable to claims where an NOD is filed prior to June 20, 2007). Thus, the Board concludes that the appellant is entitled to a supplemental payment for the extra monetary benefits stemming from the TDIU application effective from the date of the Board's final November 7, 2008 decision to the date of the decision implementing the TDIU rating. Incidentally, under the RO's viewpoint, the TDIU claim was not part of the initial rating claim stemming from the successfully appealed December 2006 RO rating decision. Under this theory, the April 2010 NOD filed by the appellant would have constitute a new appeal on a new claim with attorney fee eligibility evaluated under the new regulation which provides that an attorney may charge claimants for representation after an agency or original jurisdiction has issued a decision on a claim, including a claim for an increase in rate of a benefit. See 38 C.F.R. § 14.636(c). However, this is not the case as contended by the appellant, himself. In summary, the Board finds that the appellant's representation of the Veteran in pursuing a higher initial rating entitles him to a supplemental payment for the extra monetary benefits stemming from the TDIU application effective from the date of the Board's final decision on November 7, 2008, to the date of the decision implementing the TDIU rating, November 3, 2009. Under the version of 38 U.S.C.A. § 5904(c) and 38 C.F.R. § 20.609 applicable to this claim, there is no statutory authority to pay attorney fees prior to the date of the final Board decision on November 7, 2008. The appeal, therefore, is granted to this extent. ORDER The claim of eligibility for payment of attorney fees from past-due benefits, in the form of a supplemental payment for the TDIU award effective from the date of the final Board decision on November 7, 2008, to the date of RO decision on November 3, 2009, is granted ____________________________________________ JACQUELINE E. MONROE Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs