Citation Nr: 1328614 Decision Date: 09/09/13 Archive Date: 09/17/13 DOCKET NO. 10-22 250 ) DATE ) ) THE ISSUE Entitlement to attorney fees from past-due benefits. ATTORNEY FOR THE BOARD Elizabeth Jalley, Counsel INTRODUCTION The Veteran served on active duty with the United States Navy from November 1951 to September 1953 and with the United States Air Force from March 1954 to March 1973. He retired with more than 20 years of service. This case comes before the Board of Veterans' Appeals (Board) on appeal from a December 2008 administrative decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Houston, Texas. The appellant represented the Veteran in a matter that had been appealed to the United States Court of Appeals for Veterans Claims (Court). At that time, the Veteran hired the appellant to represent him before the Court and the Board. The appellant and the Veteran entered into a fee agreement in February 2001. In May 2007, the Board granted the Veteran's claim of entitlement to service connection for a low back disability. In a June 2007 rating decision, the RO effectuated the Board's decision, granting service connection for degenerative disc disease of the lumbar spine and assigning a 20 percent rating, effective April 10, 1992. The December 2008 administrative decision determined that there were no past-due benefits payable by VA to the Veteran under the attorney fee agreement in the benefits claim in which the appellant represented the Veteran. A notice of disagreement was received from the appellant in January 2009, a statement of the case was issued in May 2010, and a substantive appeal was received in May 2010. Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2012). 38 U.S.C.A. § 7107(a)(2) (West 2002). FINDINGS OF FACT 1. The Veteran receives retired pay benefits which are not administered or paid by VA. 2. The Veteran does not meet the criteria for concurrent receipt of VA compensation benefits and retired pay. 3. The fee agreement was signed by the appellant and the Veteran in February 2001 and authorized payment to the Appellant from retroactive benefits to be paid to the Veteran by VA. 4. Because of the Veteran's receipt of retired pay, the grant of service connection following the conclusion of the Veteran's appeal did not result in a retroactive payment of VA benefits to the Veteran; that is, VA compensation was denied. CONCLUSION OF LAW In the absence of any retroactive payment from VA to the Veteran of past-due VA benefits following conclusion of the matter in which the appellant represented the Veteran, the criteria for direct payment of attorney fees to the appellant by VA have not been met. 38 U.S.C.A. §§ 5304, 5904 (West 2002); 38 C.F.R. §§ 3.700, 3.750, 20.609 (2007). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Duties to Notify and Assist 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. II. Attorney Fees The appellant in the case at hand is an attorney who represented the Veteran in a matter that was appealed to the Court. In May 2007, the Board granted the Veteran's claim of entitlement to service connection for a low back disability. In a June 2007 rating decision, the RO effectuated the Board's decision, granting service connection for degenerative disc disease of the lumbar spine and assigning a 20 percent rating, effective April 10, 1992. The appellant asserts that the fee agreement he and the Veteran signed entitles him to a sum that is equal to 20 percent of these past due benefits. 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. 38 U.S.C.A. § 5904(d) (West 2002). According to the relevant statute, 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). The implementing regulations provide that 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)(1) (2007). The Board notes, in passing, that, 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 February 2001. Thus, the prior regulations are applicable to this decision. 38 C.F.R. § 20.609 (2007). A "past-due benefit" is defined as "a non-recurring payment resulting from a benefit, or benefits, granted on appeal ... which represents the total amount of recurring cash payments which accrued between the effective date of the award ... and the date of the grant of the benefit by the agency of original jurisdiction, the Board of Veterans' Appeals, or an appellate court." 38 C.F.R. § 20.609(h)(3) (2007). In the case at hand, the underlying claim of entitlement to service connection claim for a low back disability was received by VA on April 10, 1992. Following a lengthy appeals period, which involved appeals to the Board and to the Court, service connection for a low back disability was granted by the Board in May 2007. In a June 2007 rating decision, the RO effectuated the Board's May 2007 decision, granting service connection for degenerative disc disease of the lumbar spine and assigning a 20 percent rating, effective April 10, 1992. The Veteran was notified of this decision in an August 2007 letter, and the benefit award was implemented effective September 1, 2007. That is, the first on-time benefit payment that was made to the Veteran in connection with this claim was in September 2007. Thus, the benefits that were granted to the Veteran from the period beginning on April 10, 1992, and ending in August 2007 are considered to have been the past due benefits at issue for the purpose of the attorney fees claim. The Board notes that the appellant does not argue that he is entitled to a sum that is in excess of 20 percent of the past due benefits that were awarded to the Veteran as a result of the favorable service connection determination. 38 C.F.R. § 20.609(h)(1)(i) (2007). The Board further notes that the appellant has not defined the time period for the "past-due benefits" as covering a period that is inconsistent with the Board's above discussion. The Board does not dispute that the claim at issue was resolved in a manner that is favorable to the Veteran, thus satisfying 38 C.F.R. § 20.609(h)(1)(ii) (2007). Rather, the resolution of this case involves application of 38 C.F.R. § 20.609(h)(1)(iii) (2007) which, as noted above, requires that the award of past-due benefits results in a cash payment to a claimant from which the fee may be deducted. In December 2008, the RO issued an administrative decision that denied entitlement to payment by VA of attorney fees from past due benefits. This decision determined that there were no past-due benefits payable by VA to the Veteran because the Veteran was in receipt of military retired pay from the April 10, 1992, effective date of the VA compensation award to the June 1, 2007, date of the rating decision. The record in the case at hand establishes that the Veteran served in the United States Navy and Air Force for more than 20 years and receives retired military pay benefits. Applicable law generally provides that not more than one award of pension or compensation will be made concurrently to any person based on his service. 38 U.S.C. 5304 (West 2002 & Supp. 2012); 38 C.F.R. § 3.700 (2012). When the Veteran in the case at hand was awarded VA disability compensation, the RO determined that the Veteran did not meet any statutory or regulatory criterion for concurrent receipt of retired pay and VA compensation benefits. 38 C.F.R. § 3.750 (2012) (authorizing receipt of both military retired pay and VA compensation if a Veteran's disability rating is 50 percent or higher). The Board has confirmed that duplicate retired military pay benefits and VA compensation benefits are precluded by law in this case, as the Veteran is not in receipt of VA disability compensation benefits at a rate of 50 percent or higher. Therefore, the Veteran could not receive VA compensation benefits in addition to the military retirement benefits that he had already been paid. The appellant nonetheless contends that he is entitled to an amount that is equal to 20 percent of the past-due VA compensation benefits, even though the Veteran could not actually receive the past-due VA compensation benefits that had been awarded because he had already received these benefits from the military in the form of retirement benefits. The appellant has presented a two-part argument in support of his position that he may be paid attorneys fees based on the entire amount of retroactive pay that the Veteran would have been entitled to receive had he not received any military retirement pay. First, in his May 2010 substantive appeal, the appellant cited the case of Snyder v. Nicholson, 489 F.3d 1213 (Fed. Cir. 2007), to argue that the Court "has held that the term 'awarded' is not the same thing as 'paid,' and that attorney's fees may be granted even when there is no actual payment to a claimant." Based on the above understanding of Snyder, the appellant argues that 38 U.S.C. § 5904(d) itself does not forbid the payment of attorneys fees in situations in which an award has been made to the Veteran but there has been no corresponding cash payment. Second, the appellant contends that the third element of 38 C.F.R. § 20.609(h)(1) (2007), the requirement that the award of past-due benefits result in a cash payment to a claimant from which the fee may be deducted, is invalid to the extent that such a requirement does not appear in the applicable statute. Addressing the first contention, the Board notes that the Court in Snyder held that the attorney's fee should be calculated based on the total 'award' of disability compensation made by VA 'on the basis of the claim' before VA reduced the retroactive payment amount due to the Veteran's incarceration. See 38 U.S.C.A. § 5313 (limiting benefits which may be paid to an incarcerated Veteran) (VA reduced the attorney fee by about $10,000 when it reduced the actual retroactive payment to the Veteran from $90,000 to the 10 percent compensation allowed for incarcerated Veterans). The Federal Circuit held that VA's payment to the attorney should have been calculated on the amount of benefits awarded to the Veteran without consideration of the reduction due to the Veteran's incarceration. The appellant suggests, in his substantive appeal, that there is no statutory basis for treating the 'award' in this case differently than the award in the Snyder case. There is, however, a significant difference between the Veteran in this case and the Veteran in the Snyder case. In Snyder, what was at issue was the amount of the retroactive benefit for purposes of determining the proper attorney fee. In this case, as distinguished from the Snyder case, the Veteran is not entitled to a retroactive payment from VA. The appellant's reliance on the definition of the term 'award' in Snyder is misplaced, because the Court clearly stated in Snyder that attorney fees were limited to payment out of retroactive benefits. As there are no benefits due and owing in this case, and, therefore, no retroactive benefits payment to be made by VA to the Veteran, there is no basis for eligibility for payment to the appellant of attorney fees from VA. Where the represented Veteran has no legal entitlement to an actual retroactive payment from VA at the conclusion of the matter which required representation, the attorney is not eligible to receive payment of an attorney fee directly from VA. The preclusion against the Veteran's receipt of duplicative benefits is thus statutory. The Court's definition of 'award' in Snyder does not make an exception to the statutory preclusion of duplicate benefits. In response to the appellant's second contention, even if the Board were to find that a cash payment is not prohibited under 38 U.S.C. § 5904(d), it must still deny the requested attorney fees based on 38 C.F.R. § 20.609(h) (1)(iii) (2007). As noted above, an attorney fee agreement will be honored only if the award of past-due benefits results in a cash payment to a claimant from which the fee may be deducted. Furthermore, the Board notes that the appellant has not actually identified a conflict between the statute and regulation. Rather, the appellant has merely argued that the statute may be interpreted as providing discretion to VA with regard to the payment of attorneys fees in such cases in which there is no actual payment to a claimant. The Board does not find that the appellant has presented a valid rationale for disregarding 38 C.F.R. § 20.609(h) (2007) as being inconsistent with 38 U.S.C. § 5904(d). The Board must further emphasize that when considering an appeal, it is bound by law to follow the applicable statutes, VA regulations, and precedent opinions of VA General Counsel. 38 U.S.C.A. § 7104(c) (West 2002); 38 C.F.R. § 19.5 (2012). The statute provides no exception for payment of attorney fees by VA as if there were a monetary award of past-due benefits. In short, no cash payment of past-due benefits was awarded in this case, and the appeal for eligibility for direct VA payment of the Appellant's attorney fee must be denied. ORDER Entitlement to attorney fees for past due benefits is denied. _________________________________________________ DEBORAH W. SINGLETON Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs