Citation Nr: 1801478 Decision Date: 01/09/18 Archive Date: 01/19/18 DOCKET NO. 09-42 039A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Winston-Salem, North Carolina THE ISSUE Whether withholding of attorney fees in the amount of $16,784.49 was proper. (The compensation claims that the Veteran has perfected for appeal are the subject of a separate decision of the Board.) REPRESENTATION Appellant represented by: North Carolina Division of Veterans Affairs ATTORNEY FOR THE BOARD J.R. Bryant INTRODUCTION The Veteran had active service in the United States Army from September 1972 to September 1975. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a September 2015 administrative decision that found that the Veteran's former attorney was entitled to attorney fees in the amount of $16,784.49. This case was previously before the Board in April 2017 and was remanded for a videoconference hearing, which was scheduled for September 12, 2017. The Veteran later canceled his hearing and thus his hearing request is considered withdrawn. 38 C.F.R. § 20.704(e) (2017). FINDINGS OF FACT 1. In April 2010 and September 2012, the Veteran and the attorney executed a valid fee agreement, which specified a fee equal to 20 percent of the total of any past-due benefits awarded based upon the Veteran's pending claims. 2. Attorney fees calculated in the amount of $16,784.49, or 20 percent of past due benefits, fairly reflects the attorney's contributions to the Veteran's claims for service connection for bilateral radiculopathy, lumbar strain and cervical strain. CONCLUSION OF LAW The withholding of attorney fees in the amount of 20 percent of past-due benefits, calculated in the amount of $16,784.49, was proper. 38 U.S.C. § 5904 (2012); 38 C.F.R. §§ 14.631, 14.636 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION Duties to Assist and Notify 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 (2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2017). However, an attorney fee dispute is not a "claim" for disability compensation benefits. The Court 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). Law and Analysis In this case, the Veteran disputes the payment of attorney fees to his former attorney. In August 2015, the AOJ granted service connection for bilateral radiculopathy, lumbar strain and cervical strain, effective from August 29, 2008. The grant resulted in a net back pay award of $83,922.46. In September 2015, the AOJ notified the Veteran that it was withholding $16,784.49 (20 percent of that amount) for the payment of attorney fees. The Veteran appealed, stating that because the attorney withdrew as his representative in February 2014, she was no longer representing him when the claim was decided in August 2015. Therefore payment should not have been withheld from his retroactive benefits for his service-connected disability claims. See VA Form 21-0958, Notice of Disagreement, dated September 22, 2015 and VA Form 214138, Statement in Support of Claim, dated October 30, 2015. He specifically argues that the paperwork for disability benefits, including the notice of disagreement, was already filed and being worked on by the RO prior to hiring and signing an agreement with the attorney. He further states that the attorney did nothing to assist him with his claim, in that he never received correspondence or follow-up from her office. As a result he terminated her appointment as representative prior to any decision for his service connected disabilities being granted. See VA Form 9, Appeal to Board of Veterans' Appeals, dated December 15, 2015. Under VA law, agents and attorneys may charge claimants or appellants for representation provided that the AOJ has issued a decision on a claim or claims, a Notice of Disagreement (NOD) with respect to that decision has been filed on or after June 20, 2007, the agent or attorney has complied with the power of attorney requirements set forth in 38 C.F.R. § 14.631, and has complied with the fee agreement requirements in 38 C.F.R. § 14.636(g). Fees permitted for services of an agent or attorney admitted to practice before VA must be reasonable. They may be based on a fixed fee, hourly rate, a percentage of benefits recovered, or a combination of such bases. Factors for consideration in determining whether fees are reasonable include: (1) the extent and type of services the representative performed; (2) the complexity of the case; (3) the level of skill and competence required of the representative in giving the services; (4) the amount of time the representative spent on the case; (5) the results the representative achieved, including the amount of any benefits recovered; (6) the level of review to which the claim was taken and the level of the review at which the representative was retained; (7) rates charged by other representatives for similar services; and (8) whether, and to what extent, the payment of fees is contingent upon the results achieved. 38 C.F.R. § 14.636(e). 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 C.F.R. § 14.636(h)(1). 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. 38 C.F.R. § 14.636(h)(1)(iii). Although the Veteran has a right to discharge his attorney, the termination of representation does not terminate the attorney's right under a valid contract, i.e., a fee agreement, to collect fees for work performed prior to termination that resulted in the claim being resolved in a manner favorable to the Veteran if all or any part of the relief sought is granted. 38 U.S.C. § 5904(d)(2). Where, however, an attorney is dismissed prior to successful completion of the veteran's claim, there is no presumption of reasonableness and the attorney is not automatically entitled to the full 20 percent fee. Scates v. Principi, 282 F.3d 1362, 1365 (Fed. Cir. 2002). Instead, the attorney is entitled to a fee that fairly and accurately reflects his or her contribution to and responsibility for the benefits awarded. Id. Factors which may be relevant in such a determination include: the reason for termination of the attorney's representation; whether the fee should be calculated by days spent on the case by the former attorney or the number of hours spent on the case as compared to hours spent by other representatives; whether the attorney can recover under another legal theory such as quantum meruit (Latin for "what is deserved"); whether the attorney can seek recovery from the veteran in another forum such as a state court; and whether any other representative is also seeking legal fees for services performed for the veteran in the case. Id. at 1368-69. Thus, when determining the reasonableness of an attorney fee, the Board must consider both the regulatory factors and the Scates factors. Lippman v. Shinseki, 21 Vet. App. 184, 189-90 (2007). The essential facts of the case are not in dispute. The Veteran filed an application to reopen previously denied claims of entitlement to service connection for neck, back, and bilateral leg conditions in August 2008. At that time, he appointed the North Carolina Division of Veterans Affairs (NCDVA)/American Legion as his representatives. See VA Form 21-22, dated in October 2007. In March 2009, the AOJ issued a rating decision denying reopening of the claims, and the Veteran filed a NOD in April 2009. A Statement of the Case (SOC) was issued in November 2009, and the Veteran filed a Substantive Appeal in November 2009. Following the receipt of additional evidence, a Supplemental SOC (SSOC) was issued in February 2010. In April 2010, the Veteran submitted a VA Form 21-22a, appointing a private attorney, as his representative. An accompanying April 2010 fee agreement indicated that attorney fees would be 20 percent of any past-due benefits awarded based upon the Veteran's pending claims. The attorney fee agreement included the name of the Veteran, his VA file number, and specific terms under which the amount to be paid for the services of the attorney would be assessed. In April 2010, the attorney filed a Freedom of Information Act (FOIA) request to obtain a copy of the Veteran's claims file and in August 2010, submitted a supporting medical statement on his behalf. In December 2010, the attorney filed a new claim for service connection for radiculopathy as a residual of a low back injury, which was denied in September 2011. In October 2011, she submitted a NOD for the September 2011 denial of service connection for radiculopathy as a residual of a low back injury. In March 2012, the attorney submitted an independent medical opinion from B.A. Cestaric, DO and later appeared with him at a March 2012 Board hearing on the issue of whether new and material evidence had been submitted to reopen a claim of degenerative joint disease of the spine, neck, legs, feet, and hands. An April 2012, Board decision reopened the service connection claims based on private medical opinions and the Veteran's testimony clarifying the injuries to his back, neck and legs, he sustained during parachute training in service. These issues were then remanded for additional development. In September 2012, VA received an updated VA Form 21-22(a) from the attorney and signed by the Veteran. A fee agreement was also received at this time, noting 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. The attorney also filed a FOIA request to obtain a copy of the Veteran's claims file and also made a request for VA medical records. In October 2012, the attorney withdrew the issue of service connection for radiculopathy secondary to low back injury residuals. She later submitted additional evidence in February 2013 and in May 2013 requested a status update from the RO regarding the Veteran's reopened service connection claims. During this timeframe the attorney also made a series of unsuccessful attempts to obtain records regarding a December 1975 accident. VA examinations were conducted in February 2014 pursuant to the Board's April 2012 remand. On February 18, 2014, the Veteran's attorney submitted formal notification of her withdrawal as the attorney of record for the Veteran and shortly thereafter, in March 2014, the Veteran appointed NCDVA as his representative. As noted above, in August 2015, the AOJ granted service connection for bilateral radiculopathy, lumbar strain and cervical strain effective from August 29, 2008. The grant of service connection resulted in the award of VA benefits in the amount of $83,922.46, with $16,784.49 (20 percent) withheld for attorney fees. The Veteran and attorney signed valid fee agreements in April 2010 and September 2012. The Board finds the agreements to be valid, as they were properly filed with VA and contain all required information in accordance with 38 C.F.R. § 14.636(g). Thus, the criteria of 38 C.F.R. § 14.636 have been met. As such, the Board finds the basic entitlement to attorney-fees has been established in this case. In determining reasonable attorney fees under the circumstances of this case, the standard is quantum meruit or "as much as deserved," as noted above. In applying this analysis, the Board has considered the extent and type of services the attorney performed prior to being discharged, as well as the contentions advanced by the Veteran. While the Veteran may question the degree of involvement in the work provided by the attorney, the record reflects the attorney performed substantial services for the Veteran for the period between April 2010 and February 2014. Following her appointment as representative, the attorney submitted medical evidence and obtained supporting private medical opinion on the Veteran's behalf. She also provided assistance to the Veteran at his Board hearing, which presumably required spending some amount of time reviewing the facts of his case. Moreover, the attorney's efforts appear to have influenced the April 2012 Board's decision to reopen the service connection claims on the basis of new and material evidence having been submitted and then remanding the issues for additional development. Ultimately, it was that remand, and the development undertaken pursuant thereto, that resulted in the grant of service connection for bilateral radiculopathy, lumbar strain and cervical strain in August 2015. Further, the fee agreement between the parties allows for a 20 percent award of past due benefits and, as has been noted, fee agreements that do not exceed 20 percent of past-due benefits are presumed reasonable. See 38 C.F.R. § 14.636(e),(f). The Veteran willingly entered into a fee agreement for such a payment and did not terminate said agreement until shortly before benefits were awarded. Therefore, the withholding and payment to the attorney of $16,784.49 in attorney fees was proper, and the Veteran's appeal to prevent the withholding/payment of such payment is denied. ORDER The withholding and payment of attorneys fees in the amount of $16,784.49 from past-due benefits resulting from an August 2015 rating decision is proper; the Veteran's appeal of this payment is denied. ____________________________________________ Thomas H. O'Shay Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs