Citation Nr: 1317431 Decision Date: 05/29/13 Archive Date: 06/06/13 DOCKET NO. 10-28 054 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Houston, Texas THE ISSUE Whether the payment of $172.80 in attorney fees from past-due benefits is proper. ATTORNEY FOR THE BOARD J. W. Kim, Counsel INTRODUCTION The Veteran had active service from June 1974 to June 1975. This appeal comes before the Board of Veterans' Appeals (Board) from a September 2009 administrative decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Houston, Texas, that determined that the Veteran's attorney was entitled to $172.80 in fees in connection with a September 2009 rating decision that granted service connection for a lumbar spine disability, a left knee disability, a left leg disability, and major depressive disorder with psychosis. FINDINGS OF FACT 1. The Veteran was receiving pension benefits, effective June 1, 2000. 2. Due to the award of service connection in a September 2009 rating decision, the Veteran was entitled to compensation benefits, effective March 1, 2000. 3. Since June 1, 2000, the Veteran's pension benefits have been greater than his compensation benefits. 4. Due to the receipt of pension benefits, the award of service connection resulted in a retroactive payment only for the months of March, April, and May 2000, which totaled $864.00. CONCLUSION OF LAW The payment of $172.80 in attorney fees from past-due benefits is proper. 38 U.S.C.A. §§ 5304, 5904 (West 2002); 38 C.F.R. §§ 3.700, 20.609 (2007). REASONS AND BASES FOR FINDINGS AND CONCLUSION VA has a duty to notify and a duty to assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.159, 3.326(a) (2012). However, those duties do not apply to cases where the claimant is not seeking benefits under Chapter 51 of Title 38 of the United States Code but is instead seeking a decision regarding how benefits will be distributed under another Chapter. Sims v. Nicholson, 19 Vet. App. 453 (2006). Moreover, VA's duties to notify and assist do not affect matters limited to statutory interpretation, as in this case. Mason v. Principi, 16 Vet. App. 129 (2002); Dela Cruz v. Principi, 15 Vet. App. 143 (2001). Therefore, discussion of VA's duties to notify and assist is not required in this case. Not more than one award of pension or compensation will be made concurrently to any person based on his service except as provided in 38 C.F.R. § 3.803 relating to naval pension and 38 C.F.R. § 3.750(c) relating to waiver of retirement pay. 38 U.S.C. 5304 (West 2002 & Supp. 2012); 38 C.F.R. § 3.700 (2012). Statutes governing veteran's benefits authorize payment of attorney fees out of "past-due" benefits. 38 U.S.C.A. § 5904(d) (West 2002). The total fee payable to any attorney under such a fee agreement "may not exceed 20 percent of the total amount of any past-due benefits awarded on the basis of the claim." 38 U.S.C.A. § 5904(d)(1) (West 2002). The statute also precludes an attorney from claiming as a fee a portion of the future monthly benefits that will be paid to the veteran. The statute further provides that a fee pursuant to a statutory fee agreement is to be paid to the attorney by VA directly from any past-due benefits awarded on the basis of the claim. 38 U.S.C. § 5904(d)(2)(A)(i) (West 2002). On December 22, 2006, 38 U.S.C.A. § 5904 was amended by the Veterans Benefits, Health Care, and Information Technology Act of 2006, but only for those claims filed 180 days after the passage of the Act. Pub. L. No. 109-461. VA promulgated regulations implementing that Act on May 22, 2008. Those regulations, effective June 23, 2008, replaced 38 C.F.R. § 20.609 with 38 C.F.R. § 14.636. However, those changes only apply to fee agreements entered into on or after June 23, 2008. 73 Fed. Reg. 29,852, 29,866 (May 22, 2008). In this case, the fee agreement was entered into in January 2006. Thus, the prior regulations are applicable to this decision. 38 C.F.R. § 20.609 (2007). A VA 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 in a proceeding before VA or an appellate court. VA will honor such an agreement only if (1) the total fee payable (excluding expenses) does not exceed 20 percent of the total amount of 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, and (3) the award of past-due benefits results in a cash payment to a claimant from which the fee may be deducted. 38 C.F.R. § 20.609(h) (2007). In this case, the Veteran's representative, a private attorney, contends that he is entitled to more than the calculated $172.80 in attorney fees from past-due benefits in connection with claims for service connection for a lumbar spine disability, a left knee disability, a left leg disability, and a psychiatric disability. The Veteran's claims for service connection for the residuals of a broken left leg, a back disability secondary to the broken left leg, and a knee disability secondary to the broken left leg were denied in a May 2000 rating decision. His claim for service connection for major depressive disorder with psychosis was denied in a December 2004 rating decision. The Veteran filed a timely notice of disagreement to each determination. In a July 2005 decision, the Board denied the claims. In January 2006, the Veteran entered into a fee agreement with the attorney that provided for the payment of services to be made directly to the attorney by VA out of any past-due benefits awarded. In a November 2006 Order, pursuant to a Joint Motion for Remand, the Court remanded the claims to the Board. In a June 2009 decision, the Board granted service connection for a back disability, a left leg disability, a left knee disability, and a psychiatric disability.. A September 2009 rating decision implemented the Board's decision. The RO granted service connection for a lumbar spine disability, assigning a 20 percent rating effective February 29, 2000, and a 40 percent rating from December 1, 2000; granted service connection for residuals of a broken left leg, assigning a 0 percent rating effective February 29, 2000; granted service connection for a left knee disability, assigning a 10 percent rating effective February 29, 2000; and granted service connection for major depressive disorder with psychosis, assigning a 30 percent rating effective February 11, 2003. The Veteran's combined rating for compensation was 30 percent from February 29, 2000, 50 percent from December 1, 2000, and 60 percent from February 11, 2003. In calculating the Veteran's past-due benefits, the RO had to consider not only the varying combined ratings for compensation during the different time periods, but also the combined rating for pension. The Veteran was awarded pension benefits in a February 2001 rating decision with a 60 percent nonservice-connected rating, effective May 10, 2000, with the first award being paid on June 1, 2000. Initially, the Board notes that there is no question as to whether the attorney entered into a valid fee agreement with the Veteran or whether the attorney is entitled to 20 percent of past-due benefits. The only question is the calculation of the amount of past-due benefits. The Veteran has been receiving pension benefits since June 1, 2000, at which time he was entitled to $749.00 per month. Due to the award of service connection in the September 2009 rating decision, the Veteran was entitled to compensation benefits from March 1, 2000 at a rate of $288.00 per month. Since June 1, 2000, and prior to issuance of the past-due payments, his pension benefits have been greater than his compensation benefits. Due to the receipt of pension benefits, the award of service connection resulted in a retroactive payment only for the months of March, April, and May 2000, which totaled $864.00. The attorney is entitled to 20 percent of that amount, or $172.80. Therefore, the Board finds that the payment of $172.80 in attorney fees from past-due benefits is proper. The Board notes the attorney's assertion that the past-due benefits totaled $88,448.00 and that he is entitled to 20 percent of that amount, or $17,689.60. However, the Board notes that generally a VA claimant is entitled to one award of pension or compensation at any one time. 38 U.S.C. 5304(a) (West 2002 & Supp. 2012); 38 C.F.R. § 3.700 (2012). That is the case for the Veteran, and he does not qualify for an exception. Thus, although the Veteran was entitled to receive a large amount of past-due compensation benefits, he was only entitled to receive either compensation or pension benefits. As of June 1, 2000, the previously established pension benefits were the greater benefit. Therefore, the Veteran was not entitled to payment of any compensation benefits as of June 1, 2000, because the pension was the greater benefits. As discussed above, the Veteran only received past-due compensation benefits totaling $864.00. VA will withhold payment under an attorney fee agreement only if (1) the total fee payable (excluding expenses) does not exceed 20 percent of the total amount of 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, and (3) the award of past-due benefits results in a cash payment to a claimant from which the fee may be deducted. 38 C.F.R. § 20.609(h) (2007). The regulations specifically note that an award of past-due benefits may not result in a cash payment to the Veteran. 38 C.F.R. § 20.609(h)(iii) (2007). In this case, the cash payment of past-due benefits totaled $864.00. Therefore, the appropriate payment was 20 percent, or $172.80. The Board also notes the attorney's reliance on case law regarding the calculation of attorney fees when past-due benefits are reduced by law, including administrative offset to collect a debt or overpayment. Snyder v. Nicholson, 489 F.3d 1213 (2007). However, his reliance is misplaced as this case does not involve any such reduction in past-due benefits. In summary, the attorney is entitled to payment of 20 percent of the amount of compensation benefits actually awarded as a cash payment to the Veteran as a result of benefits granted. He is not entitled to 20 percent of the amount of compensation benefits that would have been owed to the Veteran but for the pension benefits that the Veteran had already received. The Veteran's past-due compensation benefits totaled $864.00 and 20 percent of that amount is $172.80. Therefore, the attorney is not entitled to additional fees in this case. The claim in this matter is being denied based on the application of law as applied to facts not materially in dispute. The Board finds that the claim for additional payment from past-due benefits must be denied. 38 U.S.C.A. § 5107(b) (West 2002); 38 C.F.R § 3.102 (2012); Sabonis v. West, 6 Vet. App. 426 (1994). ORDER The payment of $172.80 in attorney fees from past-due benefits is proper. Additional fees are not warranted and the claim is denied. ____________________________________________ Harvey P. Roberts Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs