Citation Nr: 1752999 Decision Date: 11/17/17 Archive Date: 11/22/17 DOCKET NO. 11-04 783 ) DATE ) ) THE ISSUE Entitlement to relief from the payment of attorney fees from past-due benefits in the amount of $27,292.03 resulting from the grant of a total disability rating based upon individual unemployability (TDIU). ATTORNEY FOR THE BOARD T. Minot, Associate Counsel INTRODUCTION The Veteran served on active duty from March 2001 to July 2001. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a February 2017 administrative decision of the Department of Veterans Affairs (VA) Agency of Original Jurisdiction (AOJ) in Montgomery, Alabama, withholding $27,292.03 from the Veteran's award for attorney fees. The Veteran filed a notice of disagreement with the decision in February 2017. A statement of the case was issued in May 2017, and the Veteran filed a timely substantive appeal. This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2017). 38 U.S.C. § 7107(a)(2) (2012). FINDINGS OF FACT 1. In January 2017, the RO issued a rating decision granting entitlement to a TDIU, effective December 2, 2010. 2. In July 2010, the Veteran signed a contingent fee agreement with C.K., a private attorney. This agreement specified a fee equal to 20 percent of the total of any past-due benefits awarded based upon the Veteran's pending claims for service connection for depression and entitlement to individual unemployability. A VA 21-22(a) was also filed at this time. 3. The fee agreement in this case was reasonable, and the attorney was properly awarded $27,292.03. CONCLUSION OF LAW The requirements for payment of attorney fees in the amount of 20 percent of past-due benefits payable to the Veteran calculated in the amount of $27,292.03 have been met. 38 U.S.C. § 5904 (2012); 38 C.F.R. § 14.636 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION VA's Duties to Notify and Assist As provided for by the Veterans Claims Assistance Act of 2000 (VCAA), VA has a duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C. §§ 5100, 5102, 5103, 5103A, 5107, 5126; 38 C.F.R. § 3.159. However, an attorney fee dispute is not a "claim" for disability compensation benefits. The United States Court of Appeals for Veterans Claims has held that VA's duties to notify and assist do not apply to cases where, as here, the applicant is not seeking benefits under Chapter 51 of Title 38 of the United States Code, but rather, is seeking a decision regarding how benefits will be distributed under another Chapter, i.e., Chapter 59. See Sims v. Nicholson, 19 Vet. App. 453, 456 (2006). Nevertheless, the Board notes that the due process requirements for a contested claim have been followed in this case. 38 C.F.R. §§ 19.100-102, 20.713. The Board finds that no further action is necessary under VA's duties to notify and assist. Entitlement to Attorney's Fees The Veteran contends that the payment of fees to C.K., her private attorney, resulting from an award of entitlement to a TDIU was improper. In January 2017, the Veteran was granted entitlement to a TDIU, effective December 2, 2010. The evidence of record reflects that the funds in dispute, $27,292.03, were paid following the January 2017 award of benefits. The Veteran contends that she did not authorize C.K. to represent her in her application for TDIU, and therefore is entitled to relief. As a preliminary matter, the Board notes that the regulations regarding attorney-fee agreements were amended in May 2008. The amended regulations are applicable to the claim on appeal, as the fee agreement at issue was signed subsequent to May 2008. See 73 Fed. Reg. 29,852, 29,866 (May 22, 2008) ("The new regulations apply to fee agreements entered on or after June 23, 2008. They do not apply to fee agreements entered before June 23, 2008."). Accordingly, the prior regulations applicable to fee agreements do not apply and are not directly addressed within this decision. See 38 C.F.R. § 20.609 (2007). When a claimant and an agent or attorney have entered into a fee agreement under which the total amount of the fee payable to the agent or attorney (i) is to be paid to the agent or attorney by the Secretary directly from any past-due benefits awarded on the basis of the claim, and (ii) is contingent on whether or not the matter is resolved in a manner favorable to the claimant, the total fee payable to the agent or attorney may not exceed 20 percent of the total amount of any past-due benefits awarded on the basis of the claim. A claim shall be considered to have been resolved in a manner favorable to the claimant if all or any part of the relief sought is granted. 38 U.S.C. § 5904(d); 38 C.F.R. § 14.636(h). Under VA regulations, such award of past-due benefits must result in a cash payment to a claimant or an appellant from which the fee may be deducted. (An award of past-due benefits will not always result in a cash payment to a claimant or an appellant. Under VA regulations, "past-due benefits" means 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 a VA AOJ or the Board or the lump sum payment that represents the total amount of recurring cash payments that 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 AOJ, the Board, or an appellate court. 38 C.F.R. § 14.636(h)(iii)(3). 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 AOJ 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 an increased evaluation is subsequently granted as the result of an appeal of the disability evaluation initially assigned by the AOJ, and if the agent or attorney represents the claimant or appellant in that phase of the claim, the agent or 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. 38 C.F.R. § 14.636(h)(iii)(3)(i). Regarding circumstances in which attorney fees may be charged, attorneys may charge claimants and appellants for representation before VA provided that: after an AOJ has issued a decision on a claim or claims, including any claim to reopen under 38 C.F.R. § 3.156 or for an increase in rate of a benefit, a notice of disagreement has been filed with respect to that decision on or after June 20, 2007; and the attorney has complied with the power of attorney requirements in 38 C.F.R. § 14.631 and the fee agreement requirements in 38 C.F.R. § 14.636(g). 38 C.F.R. § 14.636(c)(1). Fee agreements must be reasonable; those which do not exceed 20 percent of past-due benefits are presumed reasonable. 38 C.F.R. § 14.636(e), (f). The essential facts of the case are not in dispute. In May 2010, the Veteran's application for entitlement to a TDIU was denied. In July 2010, VA received a VA Form 21-22(a) from the Veteran's attorney, C.K., signed by the Veteran, reflecting that the attorney's representation would be limited to the claims for service connection for depression and "entitlement to individual unemployability." A fee agreement was also received at this time, noting that the Veteran agreed to pay the attorney 20 percent of the gross amount of any past due VA benefits recovered. These fees were to be withheld by VA and paid to the attorney. In January 2011, the Veteran's attorney submitted correspondence on behalf of the Veteran expressing her disagreement with the denial of a TDIU. The attorney provided argument in support of the Veteran's claim. Entitlement to a TDIU was again denied in a May 2011 statement of the case. In July 2011, the Veteran submitted a VA Form 9 appealing the denial of TDIU to the Board. Accompanying the VA Form 9 was correspondence signed by the Veteran's attorney with argument in support of her claim. As noted above, entitlement to a TDIU was eventually awarded in a January 2017 rating decision. A letter dated in February 2017 notified the Veteran that 20 percent of her TDIU award was being withheld from the January 2017 rating decision due to the valid fee agreement entered between the Veteran and her attorney, C.K. The Veteran submitted a notice of disagreement in February 2017, in which she acknowledged that there were "contracts" signed by her and C.K., but "only on the depression and the wage increase." (The claim for service connection for an acquired psychiatric disorder, to include depression, is currently on appeal and is addressed in a separate Board decision.) She further stated that "the only contracts my attorney signed off on was a PTSD/depression and increase." The Veteran submitted additional correspondence in April 2017 and May 2017 asserting that C.K. worked on her claims for PTSD and "overall increase" and was "allowed to collect 20%" on those claims. However, the Veteran asserted that she had specifically instructed VA that C.K. would not be paid for an award of TDIU, and that she "filed [her] own papers" for that claim. In her May 2017 substantive appeal, the Veteran further explained that she filed her own application for TDIU in September 2009 and that she and her attorney had a "separate contract on each item we filed and that was one item he did [not] file." Having reviewed the evidence of record, the Board finds that the Veteran's attorney, C.K., was rightfully entitled to an award of $27,292.03. In short, the January 2017 rating decision granting a TDIU resulted in the award of VA benefits in the amount of $136,460.15, with $27,292.03 (20 percent) withheld for attorney fees. The Veteran and C.K. signed a valid attorney fee agreement in July 2010 which specifically contemplated representation for entitlement to individual unemployability. Thus, the criteria of 38 C.F.R. § 14.636 have been met. The Board recognizes that the Veteran has argued that she filed her application for a TDIU on her own, prior to hiring C.K. However, the record clearly reflects that he participated in the appellate process, including submitting a notice of disagreement and VA Form 9 on the Veteran's behalf, as well as argument in support of her claim. While the Veteran may question the difficulty and degree of involvement in the work provided by C.K., the record clearly reflects that the Veteran was eventually awarded a TDIU-the issue for which C.K. assisted in the appellate process, and which was specifically identified in the VA 21-22(a) signed by both parties. In sum, there is no valid reason for the Board to find that the $27,292.03 set aside for the Veteran's attorney was improper. The Veteran's claim for relief of the withheld attorney fees must be denied. (CONTINUED ON NEXT PAGE) ORDER Fees in the amount of $27,292.03 resulting from the award of a TDIU, effective December 2, 2010, to the attorney C.K. were proper. _________________________________________________ K. A. KENNERLY Acting Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs