Citation Nr: 21063707 Decision Date: 10/15/21 Archive Date: 10/15/21 DOCKET NO. 20-17 622 DATE: October 15, 2021 ORDER The Veteran's appeal of his former attorney's eligibility to the direct payment of fees from past-due benefits awarded based on an October 2014 rating decision (that awarded claims of service connection for coronary artery bypass graft, mood disorder, peripheral neuropathy of the bilateral lower extremities (BLE), lumbar disc disease, hypertension, scars due to status post coronary artery bypass graft, and that granted special monthly compensation based on housebound criteria (SMC-HB) from August 30, 2012 to December 1, 2012) is denied. The Veteran's appeal of his former attorney's eligibility to the direct payment of fees based on an October 2014 rating decision (that granted the claims entitlement to a total disability rating based on individual unemployability (TDIU) and basic eligibility to Dependents' Educational Assistance (DEA)) is granted. FINDINGS OF FACT 1. A July 2009 rating decision denied service connection for lumbar spine disease and anxiety (mood disorder); and a September 2012 rating decision denied service connection for ischemia, hypertension, and peripheral neuropathy of the bilateral lower extremities. 2. The Veteran filed Notices of Disagreement (NODs) in May 2010, June 2010, and October 2012 with respect to July 2009 and September 2012 rating decisions. 3. The Veteran's October 2013 appointment of the private attorney Z.V. as his representative before VA and the associated fee agreement are valid. 4. In September 2014, VA received notice that the Veteran no longer wished for the attorney to serve as his representative and withdrew the power of attorney of record. 5. VA received in September 2014 the Veteran's VA-21-8940 Application for Increased Compensation Based on Unemployability, which was on the same day the VA received notice that the Veteran was no longer represented by the attorney Z.V. 6. An October 2014 rating decision granted service connection for coronary artery bypass graft, mood disorder, peripheral neuropathy of the bilateral lower extremities, lumbar disc disease, hypertension, and scars due to status post coronary artery bypass graft. along with TDIU and SMC-HB from August 30, 2012 to December 1, 2012, and basic eligibility to DEA. 7. The October 2014 grant of TDIU was awarded in the first instance, in response to a separate claim, the September 2014 VA 21-8940 Application for Increased Compensation Based on Unemployability; it was not the result of the May 2010 or October 2012 NOD. CONCLUSIONS OF LAW 1. The criteria for the eligibility to the direct payment of fees to the attorney from past due benefits awarded in the October 2014 rating decision as to the claims of service connection for coronary artery bypass graft, mood disorder, BLE peripheral neuropathy, lumbar disc disease, hypertension, and scars, along with the grant of SMC-HB from August 30, 2012 to December 1, 2012, have been met; thus, the Veteran's appeal is denied on this matter. 38 U.S.C. § 5904; 38 C.F.R. § 14.636. 2. The criteria for the eligibility to the direct payment of fees to the attorney from past due benefits awarded in the October 2014 rating decision for the claim of TDIU and basic eligibility to DEA have not been met; thus the Veteran's appeal is granted on this matter. 38 U.S.C. § 5904; 38 C.F.R. § 14.636. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Appellant is the Veteran. The Veteran was previously represented by an attorney, Z.V. This case comes before the Board of Veterans' Appeals (Board) on appeal from a December 2014 attorney fee decision (Summary of the Case) of a Department of Veterans Affairs (VA) Regional Office (RO), which, in pertinent part, determined the attorney was eligible to the direct payment of attorney fees from the award of past-due benefits based on the October 8, 2014, rating decision and awarded the attorney $38,314.74. In May 2015, the Veteran requested a motion for review of the fee agreement before the Office of General Counsel. An April 2019 internal memo confirms the motion to review the fee agreement for reasonableness (the amount) of attorney fees is currently pending before OGC. Nevertheless, the issue of whether the attorney is eligible to the direct payment of fees for past due benefits arising from the October 2014 rating decision at all remains within the jurisdiction of the Board. Therefore, the Board will address the issues below. 1. Whether the Veteran's former attorney is eligibility to the direct payment of fees from past due benefits awarded based on an October 2014 rating decision as to the granted claims for service connection and SMC-HB. 2. Whether the Veteran's former attorney is eligibility to the direct payment of fees from past due benefits awarded based on an October 2014 rating decision as to the claims of TDIU and basic eligibility to DEA. Issues 1-2: The Veteran asserts his former attorney is not eligible to the direct payment of attorney fees resulting from an October 2014 rating decision because he hired the attorney one year prior to a hearing and the attorney did not confirm if he could attend the hearing. With that concern, the Veteran terminated the attorney and informed VA he intended to pursue his appeal by himself until he could obtain another representative. He asked the attorney to provide a letter to VA to inform the agency that he no longer represented the Veteran. The attorney confirmedsending a letter notifying VA that he withdrew from representation of the Veteran. A decision review officer (DRO) contacted the attorney to confirm whether the attorney intended to attend the Veteran's hearing and the attorney stated he would not because he did not represent the Veteran. The Veteran also provided copies of the letter to the DRO via email, which occurred well in advance of the hearing date. Given the above, the Veteran believes that his former attorney should not be eligible to the direct payment of attorney fees. See NOD (January 2015). A. Applicable Law A claimant may have attorney or agent representation for the prosecution of claims for VA benefits. 38 U.S.C. § 5904(a). Under VA law, agents and attorneys may charge claimants or appellants for representation provided: after an agency of original jurisdiction has issued a decision on a claim or claims, including any claim to reopen under 38 C.F.R. § 3.156(a) or for an increase in rate of a benefit; the agency of original jurisdiction issued notice of that decision before the effective date of the modernized review system as provided in 38 C.F.R. § 19.2(a); a Notice of Disagreement has been filed with respect to that decision on or after June 20, 2007; and the agent or 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). See 38 C.F.R. § 14.636(c)(2)(i). Power of attorney must be signed by (i) the claimant; (2) the claimant's guardian; or in the case of an incompetent, minor, or otherwise incapacitated person without a guardian- spouse, parent, other relative or friend (if interests are not adverse) or the director of the hospital in which the claimant is maintained. 38 C.F.R. § 14.631(a). All fee agreements for the payment of fees for services of agents and attorneys must be in writing and signed by both the claimant or appellant and the agent or attorney. 38 C.F.R. § 14.636(g). Fee agreements must also clearly specify if VA is to pay the agent or attorney directly out of past due benefits. A direct-pay fee agreement is a fee agreement between the claimant or appellant and an agent or attorney providing for payment of fess out of past-due benefits awarded directly to an agent or attorney. A fee agreement that does not clearly specify that VA is to pay the agent or attorney out of past-due benefits or that specifies a fee greater than 20 percent of past-due benefits awarded by VA shall be considered to be an agreement in which the agent or attorney is responsible for collecting any fees for representation from the claimant without assistance from VA. 38 C.F.R. § 14.636(g)(2); see also 38 U.S.C. § 5904. When a claimant and an attorney or agent 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 attorney by the Secretary directly from any past-due benefits awarded on the basis of the claim, and (ii) is contingent on whether the matter is resolved in a manner favorable to the claimant, the total fee payable to the 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)(1) and (2). 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. Id. The term "past-due benefits" means a nonrecurring payment resulting from a benefit, or benefits, granted on appeal or awarded on the basis of a readjudicated claim after a denial by a VA agency of original jurisdiction or the Board of Veterans' Appeals 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 the applicable laws and regulations, and the date of the grant of the benefit by the agency of original jurisdiction, the Board of Veterans'' Appeals, or an appellate court. 38 C.F.R. § 14.636 (h)(3). B. Procedural History In this case, in October 2008, VA received claims for service connection for a lumbar spine and a mental health disability. A July 2009 rating decision denied the claims. VA received the Veteran's NOD as to this decision in May 2010. Next, a July 2009 rating decision denied service connection for anxiety and a lumbar spine condition. In January 2012, VA received the Veteran's claims for exposure to agent orange, peripheral neuropathy, and hypertension. An August 2012 Statement of the Case (SOC) addressed the Veteran's claims for service connection for mood disorder and lumbar spine disability. VA received the Veteran's substantive appeal (VA Form 9) in the same month as to those matters. Thereafter, a September 2012 rating decision denied service connection for ischemia, hypertension, and BLE peripheral neuropathy. VA received the Veteran's NOD in October 2012 as to the September 2012 rating decision. In September 2013, VA received a VA Form 21-22 (Appointment of Individual as Claimant's Representative) and a fee agreement, signed by both the Veteran (appellant) and attorney Z.V. (the parties). Of note, the parties attested that no compensation would be charged or paid for the attorney's services. However, the parties also attached a fee agreement with a contingency clause that the attorney would be owed 20 percent of any past-due benefits awarded to the Veteran through the attorney's representation. The AOJ rejected the VA Form 21-22 due to this inconsistency and invited the parties to submit a revised VA Form 21-22. In October 2013, VA received a revised, adequately executed VA Form 21-22, signed by both parties. In September 2014, VA received a letter from Z.V. informing the agency that he would no longer be representing the Veteran. The Veteran also filed VA 21-8940 Application for Increased Compensation Based on Unemployability. Thereafter, a September 2014 Report of General Information was associated with the Veteran's claims file, which reflects that Z.V. "was released by vet as a representative last week." See VA Form21-0820 (September 2014). Next, an October 2014 rating decision granted service connection for coronary artery bypass graft, mood disorder, BLE peripheral neuropathy, lumbar disc disease, hypertension, and scars due to status post coronary artery bypass graft , along with entitlement to SMC-HB from August 30, 2012 to December 1, 2012, TDIU, and basic eligibility to DEA. C. Analysis: Whether the Veteran's former attorney is eligibility to the direct payment of fees from past due benefits awarded based on an October 2014 rating decision as to the granted claims for service connection and SMC-HB. Based on the evidence of record, the Board concludes that the evidence is against the Veteran's appeal because the Board finds that the criteria for eligibility of fees have been met for the granted claims of service connection for coronary artery bypass graft, mood disorder, BLE peripheral neuropathy, lumbar disc disease, hypertension, and scars due to status post coronary artery bypass graft, along with SMC-HB from August 30, 2012 to December 1, 2012. 38 C.F.R. § 14.636(c)(2). In this regard, the evidence of record shows that the agency of original jurisdiction (AOJ) issued proper notice of the decisions originally denying the claims in the July 2009 and September 2012 rating decisions. The Veteran filed Notices of Disagreement (NODs) in May 2010, June 2010, and October 2012 with respect to July 2009 and September 2012 rating decisions, seeking service connection for an acquired psychiatric disorder (anxiety), lumbar disc disease, ischemia (coronary artery bypass graft), and hypertension. The Board notes that service connection for bilateral neuropathy was awarded as secondary to the service-connected disability of lumbar disc disease. See Rating Decision (October 2014). A valid power of attorney and fee agreement were of record as well, naming attorney Z.V. as the Veteran's accredited representative before VA. See VA Form 21-22a (October 2013). The Board has considered the Veteran's arguments that he dismissed the attorney prior to the DRO hearing and the ultimate grant of these particular claims. However, the relevant law clearly provides that attorneys may charge claimants or appellants for representation (work performed) that contributes to the resolution of the case in a favorable manner to the claimant. Hence, the Veteran's former attorney. Z.V., is eligible to the direct payment of fees related to these matters. The only question that remains is whether 20 percent of past due benefits is a reasonable fee for the work performed. The VA OGC will issue that determination (how much fees are reasonable for the work performed) in a separate decision in response to the Veteran's May 2015 motion for review of the fee agreement. Accordingly, the claim is denied to the extent that his former attorney Z.V. is entitled to fees from past due benefits for the grant of service connection for coronary artery bypass graft, mood disorder, BLE peripheral neuropathy, lumbar disc disease, hypertension, scars due to status post coronary artery bypass graft, and SMC-HB from August 30, 2012 to December 1, 2012 awarded in the October 2014 rating decision. 38 C.F.R. § 14.636. B. Analysis: Whether the Veteran's former attorney is eligibility to the direct payment of fees from past due benefits awarded based on an October 2014 rating decision as to the claims of TDIU and basic eligibility to DEA. Based on the evidence of record, the Board concludes that the evidence is supports the Veteran's appeal because the Board finds that attorney fees are not warranted for the award of TDIU and eligibility to DEA. Here, the evidence of record show that there was no initial rating decision on the issue of entitlement to a TDIU. Therefore, no NOD was filed as to any rating decision on TDIU, and TDIU was never on appeal, which is an essential requirement for the eligibility to attorney fees. See 38 C.F.R. § 14.636(c)(2)(i). Further, although entitlement to a TDIU is part and parcel of a claim for an increased rating, the attorney represented the Veteran on claims for service connection. See Rice v. Shinseki, 22 Vet. App. 447 (2009). There were no pending increased rating claims. To that end, the Veteran was not represented by the attorney at the time the Veteran filed the September 2014 VA 21-8940 Application for Increased Compensation Based on Unemployability; the attorney withdrew from representation earlier that month, prior to the filing of the claim for TDIU. The Board also finds that the attorney is not entitled to fees because of basic eligibility to DEA because it was awarded on the basis that the Veteran had a total service-connected disability, permanent in nature, effective November 11, 2009, which is the initial effective date of the grant of TDIU. Therefore, the Veteran's appeal is granted to the extent that the Board finds that the issues of entitlement to a TDIU and basic eligibility to DEA were separate claims and did not stem from the May 2010 and October 2012 NODs. Accordingly, the attorney is not eligible to the direct payment of fees for the TDIU and basic eligibility to DEA grants. C.A. SKOW Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Pendleton, N. The Board's decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.