Citation Nr: 1334956	
Decision Date: 10/31/13    Archive Date: 11/06/13

DOCKET NO.  10-24 880	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in San Diego, California


THE ISSUE

Entitlement to attorney fees from past-due benefits for representation of the Veteran.


WITNESSES AT HEARING ON APPEAL

The Appellant and the Veteran


ATTORNEY FOR THE BOARD

M. Peters, Associate Counsel



INTRODUCTION

The Veteran had active duty service from May 1952 to May 1956.  The appellant in this case is the Veteran's "representative," since December 2002.  This matter comes before the Board of Veterans' Appeals (Board) on appeal from a November 2009 determination by the Department of Veterans Affairs (VA) Regional Office (RO) that VA properly refused to withhold attorney fees from the Veteran's award of benefits.  The appellant has appealed that determination.

The appellant and the Veteran testified at a Board hearing before the undersigned Veterans Law Judge in June 2013; a transcript of that hearing is associated with the claims file.


FINDINGS OF FACT

1.  The appellant is not an accredited attorney or agent for purposes of representation before the RO and the Board in claims for VA benefits.

2.  The December 2002 "fee agreement" on its face demonstrates that VA was not to withhold any funds from the Veteran's award of past-due benefits for payment of attorney fees; the appellant further has explicitly stated that he does not want any payment of fees in this case to come from the Veteran's award of past-due benefits.


CONCLUSION OF LAW

The criteria for payment of attorney fees by VA for representation of the Veteran have not been met.  38 U.S.C.A. § 5904 (West 2002); 38 C.F.R. § 14.636 (2013).


REASONS AND BASES FOR FINDINGS AND CONCLUSION

In this case, the appellant has argued that VA should pay him attorney fees, apparently in equity, for his representation of the Veteran for the past ten years.  He has left it up to VA to determine the appropriate amount for what his services to the Veteran are worth for that time period, but he has made it clear, particularly in his June 2013 testimony, that under no circumstances are any attorney fees to be taken out of the Veteran's award of benefits for which the appellant served as his representative.

Historically, the Board notes that it appears that the Veteran and the appellant signed a fee agreement in December 2002, which stated, in pertinent part:

 . . . There are provisions in the law for your attorney fees to be paid by the government, and of course there are limits.  Essentially, where there is a successful award, and that includes a back pay compensation, the fee limit is 20%.  If there is no such [award], then there is essentially no payment made.  There are a ton of other reg[ulation]s and formulas in this equation which, I have yet to fathom, but so be it, as that will by my problem, with the real issue being to have your claim accepted.  

So, to put it another way, I will accept whatever is to be paid by the VA, be it zero to whatever. . . . 

The Board notes that the fee agreement was not associated with the claims file until November 2009, though both the Veteran and the appellant have indicated that they filed the fee agreement back in December 2002 when it was executed.  They both aver that VA must have lost the form.  

The Board does not find that this delay in filing the "fee agreement" is dispositive of this case, however.  There are other reasons for a denial of the payment of attorney fees in this case, as will be discussed below.  

As an initial matter, the Board notes that two letters, both dated April 22, 2011, were sent to the Veteran and the appellant, respectively, noting that VA records did not show that the appellant was an accredited representative, and that under the applicable regulations-38 C.F.R. § 14.329(b)-no individual may assist claimants in the preparation, presentation, or prosecution of claims for VA benefits as an agent or attorney unless VA has first accredited him or her for such purpose.  The Veteran's letter additionally informed him of how to go about finding accredited representative, or that he may go unrepresented until the appellant was accredited.  

With respect to accreditation and the payment of fees for representation, 38 U.S.C.A. § 5904(a) states that VA may accredit specific individuals as attorneys and agents in order to act as representatives before VA in claims for VA benefits.  38 U.S.C.A. § 5904(d) requires that payment of these accredited individuals may only be paid if the Veteran and the accredited individual enter into a fee agreement that allows for such payment.  The implementing regulation, 38 C.F.R. § 14.636(a), specifically states that the "provisions of this section apply to the services of accredited agents and attorneys with respect to benefits under the law administered by VA in all proceedings before the agency of original jurisdiction or before the Board of Veterans' Appeals regardless of whether an appeal has been initiated."  (Emphasis added).

As of the writing of this decision, VA records still demonstrate that the appellant is not an accredited representative for purposes of representation of Veterans before VA in claims for VA benefits.  

The Board is aware that under 38 C.F.R. § 14.630, the appellant, a non-accredited representative, may serve as a representative for a particular claim in very specific circumstances.  However, such individuals are not permitted to receive attorney fees under that type of arrangement.  See 38 C.F.R. § 14.636(b).  

In light of the above regulations, as an initial matter, the Board finds that the appellant's claim for attorney fees must be denied because the appellant is not a proper claimant for attorney fees because he is not an accredited representative.

Regardless, the Board must deny this claim, even if the appellant were accredited in this case, because the claim is not associated with any particularized award of past-due benefits, from which the appellant is seeking payment.  

The appellant filed his claim for attorney fees in May 2009.  It is unclear with which claim the appellant was filing for attorney fees at that time.  

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).  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.A. § 5904(d)(2)(A)(i). 

The implementing regulation, at 38 C.F.R. § 14.636, sets forth the circumstances under which VA may pay an agent or attorney directly, at 38 C.F.R. § 14.636(h).  The title of that portion of the regulation includes the words "from past-due benefits."  Significantly, 38 C.F.R. § 14.636(h)(iii) notes that VA is only authorized to honor a fee agreement if there is a "cash payment" to the Veteran from which a fee may be deducted.  The regulation specifically notes that an award of past-due benefits will not always result in a cash payment to a Veteran.  The regulation sets forth that, "For example, no cash payment will be made to military retirees unless there is a corresponding waiver of retirement pay."  The regulation references 38 U.S.C.A. § 5704.

Increased evaluation claims for the Veteran's right shoulder and otitis externa, as well as a claim for total disability rating based on individual unemployability due to service-connected disabilities (TDIU) was denied by the RO in an October 2007 rating decision.  The Board denied entitlement to a left shoulder disability in March 2008.  Finally, the Veteran was favorably awarded TDIU benefits in a September 2009 rating decision.  

At the time of the May 2009 claim for attorney fees, the Veteran's only award of monetary benefits was that December 2006 award of benefits.  The Board notes that an award of benefits was favorably returned for the Veteran's right shoulder disability in December 2006-nearly two and a half years prior to the appellant's claim for benefits.  However, that claim stems from a June 1999 claim, and that the notice of disagreement with regards to that case was received well before June 19, 2007.

VA is only allowed to pay attorney fees to the appellant from past-due benefits awarded on the basis of a claim.  As the fee agreement entered into on December 2002 clearly states, and as the appellant and the Veteran make clear in their June 2013 testimony, under no circumstances were any attorney fees to be paid out of the Veteran's award of benefits.  The appellant has specifically indicated that he did not wish any such fees to come from the Veteran's benefit award, and thus, the Board's hands are tied in this case by the appellant's own contractual language in the fee agreement-even if the Board were to find him a proper claimant, which he is not.  Therefore, VA appropriately did not withhold any monetary benefits from any award of benefits in this case.

Finally, insofar as the appellant appears to intimate both in his fee agreement with the Veteran and during his testimony that the "government would cover the Veteran's attorney fees," there are no existing regulations for which VA is allowed to cover the Veteran's attorney fees outside of 38 U.S.C.A. § 5904 and the implementing regulation, 38 C.F.R. § 14.636.

If the Board understands the appellant's argument in this case, the appellant argues VA owes him attorney fees "to be paid by the government," under the Equal Access to Justice Act (EAJA), codified at 5 U.S.C.A. § 504.  In pertinent part, that statute states: 

An agency that conducts an adversary adjudication shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust.  Whether or not the position of the agency was substantially justified shall be determined on the basis of the administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought. (Emphasis added).

The Board notes that the VA claims process is not an adversarial system.  See Comer v. Peake, 552 F.3d 1362, 1368 (Fed. Cir. 2009) (citing McGee v. Peake, 511 F.3d 1352, 1357 (Fed. Cir. 2008) for the proposition that "Because of the paternalistic nature of the proceedings, the Board, like the RO, is required "to fully and sympathetically develop the Veteran's claim to its optium before deciding it on the merits."); cf. Forshey v. Principi, 284 F.3d 1335, 1355 (Fed. Cir 2002) (noting the difference between the "more adversarial" proceedings at the Court of Appeals for Veterans Claims comparative to the proceedings at the Board).  

Therefore, EAJA does not apply in attorney fees cases before the Board or the RO; nor does the Board have the statutory authority to award such benefits.

The appellant's own words as set forth in the fee agreement strongly suggest that he was working for the Veteran on a pro bono basis, with the only expectation of compensation coming from "whatever was to be paid by the VA."  

While the Board can appreciate the appellant's hard work and dedication to the Veteran's cause and claims throughout the years, the Board is without authority to award attorney fees in this case simply because it might perceive such a grant to be equitable.  See 38 U.S.C.A. §§ 503, 7104; see also Harvey v. Brown, 6 Vet. App. 416, 425 (1994).  

In short, the appellant's claim for attorney fees for representation of the Veteran in this case must be denied, because he is not an accredited representative before VA and is therefore not a proper claimant.  Additionally, he specifically disclaims award of attorney fees from past-due benefits due to the Veteran.  The Board is without any other statutory authority to award attorney fees.  Accordingly, the appellant's claim for attorney fees for representation of the Veteran must be denied.  See 38 U.S.C.A. § 5904; 38 C.F.R. § 14.636 (2013).


ORDER

Entitlement to attorney fees for representation of the Veteran is denied.



________________________________
MARK F. HALSEY
Veterans Law Judge, Board of Veterans' Appeals

Department of Veterans Affairs