Citation Nr: 1802505 Decision Date: 01/11/18 Archive Date: 01/23/18 DOCKET NO. 98-06 296 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Montgomery, Alabama THE ISSUE Whether payment of past-due attorney fees of $16, 712.60 are owed to the Veteran's attorney representative. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD N. Snyder, Counsel INTRODUCTION The Veteran had active service from August 1973 to August 1976, April to July 1983, and March 1984 to August 1987. This matter came before the Board of Veterans' Appeals (Board) from a December 2014 decision by the Department of Veterans Affairs (VA) Regional Office (RO) determining that attorney fees of $16, 712.60 were owed to Mark R. Lippman (M.L.), attorney. The Veteran appealed the determination that attorney fees were owed. This is a simultaneously contested claim. FINDINGS OF FACT 1. The Veteran and M.L. created a valid fee agreement in March 2001. 2. The past-due attorney fee award is reasonable. CONCLUSION OF LAW The requirements for payment of attorney fees in the amount of 20 percent of past-due benefits payable to the veteran, in the calculated in the amount of $16, 712.60, have been met. 38 U.S.C.A. § 5904 (West 2002); 38 C.F.R. § 20.609 (2006). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS Factual Background In September 1998, the Veteran filed a claim of service connection for psychiatric disorder. The claim was denied in a February 1999 rating decision, and the Veteran appealed. In a December 2000 decision, the Board determined in relevant part that service connection was not warranted for an acquired psychiatric disorder. In March 2001, the Veteran and M.L., attorney, signed an agent fee agreement, which was submitted to VA for the issues denied in the December 2000 Board decision. The agreement indicates that if the Board decision were vacated and remanded, the agreement included representation of the Veteran at the Board and RO. The agreement further indicates that the Veteran (Client) agreed to pay Attorney a fee equal to 20 percent of the total amount of any past-due benefits awarded to the Client. The Veteran filed a timely appeal to the United States Court of Appeals for Veterans Claims (Court). In a May 2001 decision, the Court vacated the Board's December 2000 decision and remanded the matter to the Board for further consideration pursuant to the Court's decision. In January 2002, the Board remanded the issue to the RO for evidentiary development. In February 2005, the Veteran filed a claim of service connection for posttraumatic stress disorder (PTSD). The RO initially treated M.L. as the representative of record for this claim, including sending him a copy of the December 2005 rating decision in which service connection was denied. In January 2006, DAV submitted a notice of disagreement for the denial of service connection for PTSD. In a May 2006 memorandum, DAV reported that it held the valid power of attorney for the matter. DAV submitted another memorandum on the matter in June 2007, in which DAV noted that M.L.'s representation was limited to the issues remanded by the Court. In conjunction with that memorandum, DAV submitted a valid VA form 21-22 recognizing DAV as the Veteran's representative "for all issues with the exception of issues currently remanded by the Court." (VA subsequently determined the VA form 21-22 was not a validly executed to split representation and that DAV was the sole representative from that time.) In July 2007, the RO issued a Statement of the Case to the Veteran and DAV in which it denied service connection for PTSD. The Veteran appealed the matter to the Board. Ultimately, the RO granted service connection for PTSD with major depressive disorder with major depressive disorder in a July 2014 rating decision. Initially, the Veteran was assigned an effective date of February 5, 2005, the date the RO determined the Veteran had filed a claim for service connection for PTSD. The Veteran appealed the effective date, contending that the date of claim was the date of the claim for service connection in September 1998. In an April 2017 decision, the Board agreed, concluding that because the Veteran's claim of service connection for an acquired psychiatric disorder was continuously on appeal until it was finally granted in July 2014, the correct effective date is the day VA received the original claim, September 24, 1998. In a December 2014 RO decision letter, the RO explained that M.L., attorney, was entitled to a fee in the amount of $16, 712.60. The Veteran appealed the determination that attorney fees were owed. Legal Criteria The Veteran disputes the payment of fees to M.L., his private attorney from the March 2001 fee agreement. The Veteran contends that his fee agreement excluded PTSD as an issue subject to the agreement. The Veteran also contends that he did not authorize M.L. to work on the PTSD claim and that M.L. did not work on the PTSD claim. As a preliminary matter, the Board notes that, although the regulations regarding attorney-fee agreements were amended in May 2008, the amended regulations are not applicable to the matter on appeal, as the fee agreement at issue was signed in March 2001. 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 are addressed within this decision. See 38 C.F.R. § 20.609. There are two separate issues for determination regarding attorney fee awards: initial eligibility for a fee award and reasonableness of the fee award. See Scates v. Principi, 282 F.3d 1362, 1367 (Fed. Cir. 2002) (noting, however, that the line between entitlement and reasonableness of attorney fees may not be "clear and bright"). Initial eligibility is governed by 38 U.S.C. § 5904 (c) and 38 C.F.R. § 20.609(c)(1), (g), (h). Reasonableness is governed by 38 C.F.R. § 20.609(e), (f). Regarding initial entitlement to an attorney fee award, fees may not be charged, allowed, or paid regarding services provided before the date on which a notice of disagreement is filed. 38 U.S.C. § 5904(c)(1). Rather, attorney fees may be charged only if a final Board decision has been issued and the attorney or agent was retained not later than one year following the date of the Board decision. 38 C.F.R. § 20.609(c)(1). All attorney fee agreements must be in writing, be signed by the claimant or appellant and the attorney, and include the name of the veteran, the name of the claimant or appellant if other than the veteran, the VA file number, and the specific terms under which the amount to be paid for the services of the attorney will be determined. 38 C.F.R. § 20.609(g). The fee agreement may require that payment of fees will be from an award of past-due benefits. 38 C.F.R. § 20.609(h). Such an agreement is honored by VA only if the fee does not exceed 20 percent of the total amount of the past-due benefits awarded, the fee is contingent on whether the claim is resolved in a manner favorable to the claimant, and the award of past-due benefits results in a cash payment to a claimant from which the fee may be deducted. 38 U.S.C. § 5904(d)(2)(A); 38 C.F.R. § 20.609(h)(1). A claim is considered to have been resolved in a manner favorable to the claimant or appellant if all or any part of the relief sought is granted. 38 U.S.C.§ 5904(d)(2)(B); 38 C.F.R. § 20.609(h)(2). Regarding the reasonableness of a fee award, attorney fees must be reasonable, and may be based on a fixed fee, hourly rate, a percentage of benefits recovered, or a combination of such bases. 38 C.F.R.§ 20.609(e). 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. § 20.609(e). Where there is an agreement that fees will be paid out of past-due benefits, the total fee payable to the agent or attorney may not exceed 20 percent of the total amount of any past-due benefits awarded. 38 U.S.C. § 5904 (d)(1). Fees which total no more than 20 percent of any past-due benefits awarded are presumed reasonable. 38 U.S.C. § 5904(a)(5); 38 C.F.R. § 20.609(f). Lay assertions to the contrary are insufficient as a matter of law to overcome that presumption. In re Vernon, 8 Vet. App. 457, 459 (1996). 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. See Scates v. Principi, 282 F.3d 1362, 1366 (Fed. Cir. 2002). Instead, the attorney is entitled to a fee that fairly and accurately reflects his 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. Scates, 282 F.3d 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). Analysis Initially, the Board finds that the fee agreement was valid under the law then in effect: the NOD was filed before June 19, 2007, and the fee agreement was validly executed and submitted within a year of the issuance of a final decision by the Board. Thus, the Board finds the "initial eligibility" requirement is met. The remaining issue is the reasonableness of the fee award. The record indicates that M.L.'s representation was effectively terminated by a June 2007 VA form 21-22. See October 13, 2015, letter. The record indicates that the Veteran and M.L. were unaware of this termination, however, and that M.L. prepared correspondence and solicited status updates in conjunction with the claim for service connection for a psychiatric disorder up to the July 2014 rating decision. The record further indicates that service connection was granted, in part, for major depressive disorder and that the Veteran subsequently successfully appealed the effective date assigned in the July 2014 rating decision based on an argument that the appropriate date of claim was the September 1998 claim for service connection for an acquired psychiatric disorder, which was the issue previously handled by M.L. The termination of representation does not terminate the attorney's right under a valid contract, that is, 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). In determining reasonable attorney fees under the circumstances of this case, the standard is quantum meruit or "as much as deserved," as noted above. The Board has considered the factors outlined in Scates, as well as the contentions advanced by the Veteran. The Board concludes that the payment of 20 percent from past-due benefits is warranted. The Board recognizes that this award constitutes a substantial sum due the attorney but concludes such a payment is not unreasonable or excessive within the broader scope of contingency fee-based legal representative of veterans. The Veteran willingly entered into a fee agreement in 2001 for such a payment and did not knowingly terminate said agreement, and service connection was granted, in part, for a psychiatric disorder other than PTSD. Thus, the relief from payment of attorney's fees of $16, 712.60, as sought by the Veteran, is denied. ORDER Having determined past-due attorney fees of $16, 712.60 are owed to the Veteran's attorney representative, the claim is denied. ____________________________________________ STEVEN D. REISS Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs