Citation Nr: A21020501
Decision Date: 12/23/21	Archive Date: 12/23/21

DOCKET NO. 210729-175229
DATE: December 23, 2021

ORDER

Entitlement to attorney fees based on the past-due benefits awarded in an August 2020 rating decision is granted.

FINDINGS OF FACT

1. The Veteran died in November 2020 and the claimant is the Veteran's surviving spouse.

2. The claimant and the appellant executed and filed a valid fee agreement and VA Form 21-22.

3. A Notice of Disagreement (NOD) was filed in June 2017 with the rating assigned for PTSD. 

4. A rating of 70 percent effective August 13, 2012 was assigned in an August 2020 Rating Decision.

5. In a June 2021 Summary of the Case, the appellant was found eligible for attorney fees, but entitled to $0; after an audit, the AOJ issued a corrected November 2021 Summary of the Case awarding the attorney 20 percent of past-due benefits.

CONCLUSION OF LAW

The criteria for entitlement to attorney fees based on the past-due benefits awarded in an August 2020 rating decision have been met.  38 U.S.C. § 5904; 38 C.F.R. § 14.636. 

REASONS AND BASES FOR FINDING AND CONCLUSION

The Veteran served on active duty in the United States Navy from September 1954 to January 1974.   The Veteran died in November 2020, wherein his surviving spouse continued the claim as a substituted appellant.  

The fee decision on appeal was issued in June 2021 and constitutes an initial decision of the issue of attorney fees; therefore, the modernized review system, also known as the Appeals Modernization Act (AMA), applies.  On a July 2021 VA Form 10182, Decision Review Request: Board Appeal (NOD), the appellant elected the Evidence docket.  Therefore, the Board may only consider the evidence of record at the time of the agency of original jurisdiction (AOJ) decision on appeal, as well as any evidence submitted by the appellant with, or within 90 days from receipt of, the VA Form 10182.  38 C.F.R. § 20.303.

Attorney Representation and Fees

A claimant may have attorney or agent representation for the prosecution of claims for VA benefits. 38 U.S.C. § 5904. A power of attorney, executed on either VA Form 21-22, "Appointment of Veterans Service Organization as Claimant's Representative," or VA Form 21-22a, "Appointment of Attorney or Agent as Claimant's Representative," is required to represent a claimant before VA.

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; an 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). All 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. Fee agreements must be valid and, as is relevant here, must state the specific terms under which the amount to be paid for the services of the attorney or agent will be determined. Fee agreements must also clearly specify if VA is to pay the agent or attorney directly out of past-due benefits. A copy of a direct-pay fee agreement must be filed with the AOJ within 30 days of its execution. 38 C.F.R. § 14.636 (g).

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 bene2fits 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).

Entitlement to attorney fees based on the past-due benefits awarded in an August 2020 rating decision

The appellant, the claimant's attorney, asserts entitlement to the 20 percent fee stipulated in the agreement with the claimant, prior to withdrawing retirement benefits or offsets due to military pay, when it was supposed to be based on the entire amount awarded the Veteran. The Board finds that the appellant is entitled to the full pre-withdrawal amount.

As an initial matter, in January 2021, the appellant signed 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 Board finds the 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).

Next, the appellant is eligible to direct payment of fees. A Notice of Disagreement (NOD) was filed in June 2017 as to the grant of a 30 percent rating for PTSD.  Subsequently, the Board granted entitlement to a 70 percent rating for PTSDs. In an August 2020 rating decision, the RO implemented the Board's decision. In a June 2021 Summary of the Case, the RO found that the criteria for direct payment of fees were met.

In granting direct payment of fees, the RO withheld some payment to prevent an overpayment due to the receipt of military retired pay. Thus, in his July 2021 Form 10182, the appellant argued that he was not paid the full amount of fees to which he was entitled.  He asserts that attorney fees should have been 20 percent of the entire award granted to the Veteran before any offsets or reductions.

Based on a review of the evidence of record, the Board finds that the appellant is, as he claims, eligible for attorney fees based on the past-due benefits awarded in the August 2020 rating decision. Specifically, the decision resulting in a grant of benefits was decided under the Legacy system. A Notice of Disagreement was filed on the claim, and the VA Form 21-22a and fee agreement were valid and timely filed with VA. Therefore, the appellant is eligible for attorney fees.

In Rosinski v. Wilkie, 32 Vet. App. 264 (2020), the United States Court of Appeals for Veterans Claims (Court) held that VA obligations to attorneys under 38 C.F.R. § 5904 are to be determined by the total amount of past-due benefits awarded by VA, not by the amount the Veteran is actually entitled to receive. In Rosinski, the Court found that attorney fees under 38 U.S.C. § 5904 are to be determined by the amount awarded, not the amount the Veteran is actually entitled to receive. The Court held that "an award occurs with the assignment of a rating and an effective date."  Id. at 275.

Here, the appellant represented the Veteran through the January 2020 rating decision that awarded the benefits and, therefore, the 20 percent in fees listed in the Fee Agreement is presumed to be reasonable. See 38 C.F.R. § 14.636 (f)(1). The appellant is entitled to fees in the amount of 20 percent of the past-due benefits awarded, regardless of the amount of fees payable to the Veteran. See Rosinski, 32 Vet. App. at 264.

While the claimant was initially awarded a retroactive payment of $0, and therefore $0 was withheld for attorney fees, the claimant's attorney later requested an audit of actual amounts of retired pay issued.  After the audit, a September 2021 notification informed the claimant that she had received all benefits due her.  Subsequently, a November 2021 Calculation Spreadsheet and Notification Letter reflect that because of the 70 percent grant for PTSD, the claimant was owed $48,693.20 in accrued benefits.  Regardless of how much money the claimant actually receives, however, 20 percent of which ($9,738.64) should be withheld for the appellant, as the claimant's attorney.   

In so deciding, the Board notes that attorney fees may already have been paid in this case; to avoid an overpayment, the RO should confirm whether the attorney has received fees from the August 2020 award, before paying any fees as a result of this Board decision.  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.

 

B.T. KNOPE

Veterans Law Judge

Board of Veterans' Appeals

Attorney for the Board	Z. Maskatia