Citation Nr: 21063752 Decision Date: 10/15/21 Archive Date: 10/15/21 DOCKET NO. 16-60 032 DATE: October 15, 2021 ORDER Entitlement to additional attorney fees based on the past-due benefits granted in a November 2015 rating decision is denied. FINDING OF FACT The appellant is eligible for attorney fees based on the past-due benefits awarded in the November 2015 rating decision and the fees were calculated correctly. CONCLUSION OF LAW The criteria for additional attorney fees based on past due benefits awarded in the November 2015 rating decision have not been met. 38 U.S.C. § 5904 (2012); 38 C.F.R. § 14.636 (2021). REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from December 1965 to July 1967. The appellant is the Veteran's former attorney representative. This matter is before the Board of Veterans' Appeals (Board) on appeal from a January 2016 attorney fee decision of a Department of Veterans Affairs (VA) Regional Office (RO). The case was previously before the Board in March 2020 when it was remanded for compliance with contested claims procedures. Entitlement to additional attorney fees based on the past-due benefits granted in a November 2015 rating decision A claimant may have attorney or agent representation for the prosecution of claims for VA benefits. 38 U.S.C. § 5904. For initial decisions issued prior to February 19, 2019, the effective date of the modernized review system, agents and attorneys may charge claimants or appellants for representation provided: After an AOJ 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 AOJ issued notice of that decision before the effective date of the modernized review system; a notice of disagreement (NOD) 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). 38 C.F.R. § 14.636(c)(2). When a claimant or appellant 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 or appellant, the total fee payable to the attorney or agent 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 or appellant 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), 14.636(h)(2). 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 an 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 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)(3). The fees are payable to the attorney based on the amount of past-due benefits awarded regardless of the amount payable to the Veteran. See Rosinski v. Wilkie, 32 Vet. App. 264 (2020). When the benefit granted on appeal, or as the result of the readjudicated 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 rating is subsequently granted as the result of an appeal of the disability rating 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)(3)(i). The analysis of attorney fees requires the consideration of four concepts: the validity of a fee agreement; the eligibility of counsel for a fee; counsel's entitlement to a fee in a given situation; and, finally, the reasonableness of any fee that is ultimately awarded. See Cox v. McDonough, 34 Vet. App. 112 (2021). In October 2014, the Veteran and the appellant signed a VA Form 21-22a, Appointment of Individual as Claimant's Representative and a fee agreement stating that the attorney's fee to be paid will be 20 percent of past-due benefits, paid directly to the attorney by VA. 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. A copy of the agreement was received by VA in October 2014, within 30 days of its execution. The Board finds the fee agreement to be valid, as it was properly filed with VA and contains all required information in accordance with 38 C.F.R. § 14.636(g). In regard to eligibility to fees, the initial decision in this case was issued prior to the effective date of the modernized review system. In a September 2012 rating decision, the RO denied entitlement to service connection for an anxiety disorder. The Veteran filed a timely notice of disagreement with the denial in May 2013 and completed an appeal to the Board. In April 2015, the Board remanded the issue of entitlement to service connection for an acquired psychiatric disorder for additional development. In a November 2015 rating decision, the RO granted entitlement to service connection for an unspecified anxiety disorder with an evaluation of 70 percent disabling effective May 17, 2012. In a January 2016 attorney fee decision, the RO found that the appellant was entitled to attorney fees based on the past-due benefits awarded in the November 2015 rating decision. The RO found that the amount of past-due benefits, calculated from the effective date of the award through the date of the decision, was $26,767.01. The amount withheld for fees was $5,353.40, 20 percent of that amount. The Board initially finds that the appellant is eligible for attorney fees. The initial decision on the issue of entitlement to service connection for an anxiety disorder was issued prior to the effective date of the modernized review system, a timely notice of disagreement was filed on the issue, the appellant represented the Veteran during the appeal, and a valid VA Form 21-22a and fee agreement are of record. Therefore, all the criteria for eligibility to attorney fees have been met. The remaining issue before the Board is whether the attorney fees were calculated correctly. The attorney fee agreement provided for attorney fees of 20 percent of the past-due benefits, which is presumed to be reasonable. In a March 2016 notice of disagreement, the appellant asserted that the amount of fees was calculated incorrectly because the retroactive payment of $26,767 was offset by the nonservice-connected pension he had been receiving. The appellant asserted that the 20 percent of attorney's fees should have been calculated from the gross, pre-offset retroactive award which should have been closer to $56,000. A December 2015 fee calculation spreadsheet indicates that fees were calculated form June 1, 2012 to November 17, 2015. The amount paid to the Veteran from June 1, 2012 to November 17, 2015, was $27,567.93. The amount due to the Veteran following the grant of benefits in the November 2015 rating decision was $54,334.95. The RO found that there was an underpayment of $26,767.01 ($54,334.95 minus $27,567.93), which was the amount of past-due benefits due to the Veteran. The RO found that 20 percent of the amount was $5,253.40, following a $100 assessment. In this case, the Board finds that the period used to calculate the attorney fees was correct. The fees were correctly calculated from June 1, 2012, the first month after the effective date of the award, through November 17, 2015, the date of the rating decision granting the claim. In regard to the appellant's assertion that the attorney fees should have been based on the total amount due to the Veteran as a result of the decision, the Board finds that there were no withholdings prior to the calculation of the fee and the fee was correctly calculated based on the total amount of past-due benefits awarded to the Veteran. Prior to the grant of service connection, the Veteran had already received VA benefits in the form of a nonservice-connected pension. The appellant has asserted that the past-due benefits should not have been offset by the amount of nonservice-connected pension received by the Veteran prior to the grant of service connection for an anxiety disorder. The term "past-due benefits" means the lump sum payment that represents the total amount of recurring cash payments that accrued between the effective date of the award and the date of the grant of the benefit by the AOJ. 38 C.F.R. § 14.636(h)(3). In Snyder v. Nicholson, which was cited by the appellant in support of his claim, attorney fees were calculated based on the amount payable to the Veteran which was reduced due to his incarceration. See Snyder v. Nicholson, 489 F.3d 1213 (Fed. Cir. 2007). The Federal Circuit found that attorney fees should have been calculated based on the amount awarded prior to the reduction, and held that the "'total amount of any past-due benefits awarded on the basis of the claim' is the sum of each month's unpaid compensationas determined by the claimant's disability ratingbeginning on the effective date and continuing through the date of the award." Id. at 1218. In Gumpenberger v. Wilkie, the Federal Circuit held that "the plain meaning of "past-due" is "unpaid or owed," and "past-due benefits awarded on the basis of the claim" refers to the amount of benefits unpaid or owed to the claimant when his claim is granted." 973 F.3d 1379, 1382 (2020). In that case, the attorney represented the Veteran in an appeal resulting in the cancellation of a debt. The Federal Circuit found that attorney fees should be based on the amount VA improperly withheld, which was the amount "past due," not the total amount of debt cancelled. Id. at 1383. In Rosinski v. Wilkie, the Court held that fees are payable to the attorney based on the amount of past-due benefits awarded regardless of the amount payable to the Veteran. See Rosinski v. Wilkie, 32 Vet. App. 264 (2020). In Rosinski, attorney fees were not awarded because the past-due benefits were calculated based on the amount of past-due benefits following a withholding to prevent an overpayment due to the receipt of military retired pay. The Court found that attorney fees should have been awarded based on the amount of past-due benefits prior to the withholding. The Board finds that this case can be distinguished from Snyder and Rosinski. In this case, the attorney fees were calculated by subtracting the amount already paid to the Veteran in VA benefits, in the form of a nonservice-connected pension, and the amount owed to him following the grant of service connection for the anxiety disorder. The prior amount paid to the Veteran was a VA benefit, not military retired pay. Under VA regulations, a Veteran may not receive more than one award of VA compensation or retirement pay concurrently, unless the Veteran has service-connected disabilities rated as 50 percent or more. See 38 C.F.R. § 3.700, 3.750. Therefore, a portion of VA benefits may be withheld from past-due benefits to prevent an overpayment. In contrast to military retired pay, which is paid by the Service Department, a nonservice-connected pension is a VA benefit paid by VA. In addition, the amount of the Veteran's past-due benefits in this case was not reduced due to incarceration or another withholding. To determine the amount of past-due benefits owed to the Veteran following an award, the RO calculates the difference between the amount due to the Veteran following the grant and the amount of VA benefits already paid to the Veteran prior to the grant, as in this case. The calculation correctly determined the amount of benefits unpaid or owed to the claimant when his claim was granted. See Gumpenberger, 973 F.3d at 1382. The attorney fee calculations do not indicate that any portion of the Veteran's benefit was withheld prior to the calculation of attorney fees. Although the appellant asserted that the 20 percent should have been calculated based on the award prior to the offset for nonservice-connected pension, the offset of the pension, a VA benefit, is different from withholding to prevent an overpayment or reducing the benefit due to incarceration. In this case, the calculation of past-due benefits determined the amount unpaid or owed to the Veteran, and the attorney fee was based on the full amount. Therefore, the Board finds that the attorney fees were calculated correctly. In sum, the appellant is eligible for attorney fees based on the past-due benefits awarded in the November 2015 rating decision. However, as the Board finds that the attorney fees were calculated correctly, additional attorney fees based on the past-due benefits awarded in the November 2015 rating decision are not warranted. Accordingly, the claim is denied. M. SORISIO Veterans Law Judge Board of Veterans' Appeals Attorney for the Board K. Marenna, Counsel 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.