Citation Nr: 18106935 Decision Date: 06/01/18 Archive Date: 05/31/18 DOCKET NO. 14-37 397 DATE: June 1, 2018 ORDER The appeal contesting the payment of 20 percent of past-due benefits awarded to representative J.M. as a result of the grant of a 10 percent rating for left hip stress fracture effective from November 30, 2008, is denied. FINDINGS OF FACT 1. In June 2011, the Veteran and Mr. J. M. entered into a valid representation and fee agreement, which specified a fee of 20 percent of any past-due benefits awarded based on the Veteran’s pending claim, in payment for J.M.’s services representing the Veteran before the Department of Veterans Affairs (VA). That agreement and a VA Form 21-22 signed in June 2011 appointing J.M. as the Veteran’s representative were submitted to the RO. 2. The representative, J.M., then performed services in support of the Veteran’s pending claim, inclusive of submitting a timely notice of disagreement with a September 2010 decision denying a compensable rating for a service-connected stress fracture of the left hip. 3. That initiated appeal was not withdrawn, J.M. did not withdraw from representing the Veteran, and the Veteran did not dismiss or discharge J.M. from their contract for J.M.’s representation of the Veteran prior to an October 2012 Regional Office (RO) rating action granting a 10 percent rating for stress fracture of the left hip effective from November 30, 2008. 4. In December 2011, the Veteran submitted a VA Form 21-22 appointing Veterans of Foreign Wars of the United States (VFW) as his authorized representative. 5. There is not presented clear and convincing evidence that the 20 percent of past-due benefits due J.M. under the June 2011 representation and fee agreement is unreasonable. CONCLUSION OF LAW The payment to J.M. of representation fees in the amount of 20 percent of past-due benefits associated with the award of a 10 percent rating effective November 30, 2008, for left hip stress fracture is not unreasonable; the presumption of reasonableness is not overcome. 38 U.S.C. § 5904 (2012); 38 C.F.R. §§ 14.631, 14.636 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION 1. Veteran’s Contest of Payment of Fees to Representative J.M. from a Past-Due Benefits Award Relevant Facts The RO issued a rating decision in September 2010 denying an increased rating for a stress fracture of the left hip, then rated zero percent disabling. The Veteran signed a representation and fee agreement with his representative J. M. on June 19, 2011, and in that month the Veteran and Mr. J. M. also signed a VA Form 21-22 appointing Mr. J. M. as the Veteran’s authorized representative. The fee agreement, or contract for service, stated that the Veteran agreed to pay J. M. 20 percent of past-due benefits for Mr. J. M.’s work as his authorized representative before VA. Also pursuant to that agreement, the Veteran agreed to pay J. M. any such fees earned for his services even if the Veteran discharged J. M. as his authorized representative prior to a final decision or appeal awarding benefits, unless J. M. withdrew from representation. Pertinently, regarding scope of representation, the fee agreement states, “I agree that this fee agreement relates to any and all services performed on my behalf before the Veterans Administration with respect to an appeal filed on and or acted on my behalf after a promulgated rating decision where a notice of disagreement was filed on or after June 19, 2007.” On June 30, 2011, J.M. submitted a notice of disagreement with the September 2010 decision, in disagreement with the rating assigned. Also submitted was a copy of the representation and fee agreement and the signed VA Form 21-22 appointing J. M. as authorized representative. In December 2011, the Veteran submitted a VA Form 21-22 appointing Veterans of Foreign Wars of the United States (VFW) as his authorized representative. By this submission the Veteran thus automatically withdrew representative authorization for J. M., since a Veteran can only have one authorized representative before VA at a time. 38 C.F.R. § 14.631 (e). However, there is no evidence submitted to support the Veteran having dismissed or discharged Mr. J. M. from performing services under their representation and fee agreement, prior to an October 2012 RO rating action granting an increased rating to 10 percent for left hip stress fracture effective from November 30, 2008. Also in December 2011, the Veteran submitted his own completed VA Form 9 perfecting an appeal of the left hip fracture residual rating claim, responsive to a VA Statement of the Case (SOC) issued in December 2011. Subsequently, the Veteran underwent another VA examination in May 2012 addressing the left hip fracture, and contemporaneous treatment records were also obtained. The Veteran submitted private treatment records in support of his claim in June 2012. Subsequently, in June 2012, the RO issued a rating action granting a 10 percent disability rating for his stress fracture of the left hip, effective from May 1, 2012. In August 2012, the Veteran then submitted a disagreement with the effective date for the grant of a 10 percent rating for the left hip stress fracture. By an October 2012 rating action, while the rating was still the subject of appeal, the RO granted an effective date of November 30, 2008, for the award of a 10 percent rating for the stress fracture of the left hip. This October 2012 decision resulted in a benefit award inclusive of past-due benefits in the amount of $5,190. A representation fee was thus calculated as 20 percent of that sum, or $1,038. The Veteran subsequently appealed the award of representation fees to J.M. The Veteran did not contest the amount of the representation fee, but rather contended that no representation fee should be awarded to J.M. because, “This agency did not represent me. I formally withdrew their representation approximately one year prior to my appeal.” Analysis Under VA law, agents and attorneys may charge claimants or appellants for representation provided that the Agency of Original Jurisdiction (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 (or ‘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). In this case, the Veteran signed a contract of representation with the agent J.M. subsequent to the September 2010 RO rating decision denying an increased rating from the zero percent assigned for left hip stress fracture. The Veteran also submitted a VA Form 21-22 appointing J.M. as his authorized representative, and J.M. then represented the Veteran with submission of a timely notice of disagreement with that September 2010 decision. The Veteran subsequently in November 2011 submitted a new VA Form 21-22 which effectively cancelled the authorization of Mr. J.M. to represent him before VA. However, there is not presented any evidence that he then or subsequently dismissed or discharged Mr. J.M. from his service as representative under their signed contract or otherwise terminated the contract of representation by J.M. prior to the October 2012 rating action granting a 10 percent disability rating including entitlement beginning effective November 30, 2008. In essence, the Veteran contends that the benefit award from November 30, 2008, rather than from May 1, 2012, resulted from the Veteran’s disagreement with the date of that award, rather than from the initial appeal of the denial of an increased rating in September 2010, and that J.M was not providing service as a representative at that time. However, that is not the case. The rating to be assigned for the entire rating period was at issue when the representative submitted a notice of disagreement in June 2011, and the Veteran did not discharge the representative J.M. from providing service under their contract prior to the October 2012 rating action awarding that past-due benefit. Hence, the Veteran was still bound by their valid contract, and a presumption of reasonableness under the contract applies because the representation fee is not more than 20 percent of the past-due benefit award. 38 C.F.R. § 14.636 (f). Under 38 C.F.R. § 14.636 (f), the presumption of reasonableness may be rebutted through an examination of the factors in paragraph (e). Here, the Board having reviewed the above-listed factors under 38 C.F.R. § 14.636 (e), the Board does not find any clear and convincing evidence of unreasonableness. The representative performed work representing the Veteran, including reviewing the case and preparing the notice of disagreement. The Veteran’s having appointed a different representative shortly thereafter does not constitute clear and convincing evidence of unreasonableness, and neither does the Veteran’s subsequent assertion that the J.M. did not represent him, since the evidence clearly shows that he did represent him by initiating his appeal. J.M. should be awarded the full 20 percent of past-due benefits, as he is entitled under the signed June 2011 service contract between himself and the Veteran, for his service rendered in support of the claim, services inclusive of his preparation and submission of a notice of disagreement in June 2011. (Continued on next page)  The Veteran’s request to cancel the award of representation fees to J.M. in the amount of 20 percent of the past-due benefit award is therefore denied. Lana K. Jeng Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD D. Schechter, Counsel