Citation Nr: A21020537 Decision Date: 12/27/21 Archive Date: 12/27/21 DOCKET NO. 210603-163888 DATE: December 27, 2021 ORDER Entitlement to additional attorney fees based on the past-due benefits granted in a September 2019 rating decision is denied. FINDING OF FACT The appellant is eligible for attorney fees based on the past-due benefits awarded in the September 2019 rating decision and the fees were calculated correctly. CONCLUSION OF LAW The criteria for additional attorney fees based on the past-due benefits awarded in the September 2019 rating decisions have not 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 from September 1973 to September 1975. The appellant is the Veteran's current attorney representative. See December 2021 VA Form 21-22a. This matter is before the Board of Veterans' Appeals (Board) on appeal from an October 2019 decision of a Department of Veterans Affairs (VA) Regional Office (RO). In December 2019, the appellant submitted a VA Form 10182, Decision Review Request: Board Appeal (Notice of Disagreement) and elected the Direct Review docket. This case was previously before the Board in February 2021. At that time, the Board remanded the claim in order to ensure that the September 24, 2019 "Fiscal Transaction (18) Establish Attorney Fee" document was properly uploaded into the claims file. Upon remand, the RO uploaded another copy of the September 24, 2019 "Fiscal Transaction (18) Establish Attorney Fee" document and found that no additional attorney fees were due to the appellant. See May 25, 2021 VA correspondence. In June 2021, the appellant submitted another VA Form 10182 and elected the Direct Review docket. The Board also notes that the appellant filed a motion for reconsideration of the February 2021 Board decision, which was denied in July 2021. Entitlement to additional attorney fees based on the past-due benefits granted in a September 2019 rating decision. 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 or VA Form 21-22a, is required to represent a claimant before VA. The power of attorney shall contain the signature of the claimant and the signature of the agent or attorney and shall be presented to the appropriate VA office for filing in the Veteran's claims folder. 38 C.F.R. § 14.631(a). A power of attorney may be revoked at any time, and an agent or attorney may be discharged at any time. Unless a claimant specifically indicates otherwise, the receipt of a new power of attorney executed by the claimant and the organization or individual providing representation shall constitute a revocation of an existing power of attorney. 38 C.F.R. § 14.631(f)(1). 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. To be valid, a fee agreement must include the following: the name of the Veteran; the name of the claimant or appellant if other than the Veteran; the name of any disinterested third-party payer and the relationship between the third-party payer and the Veteran, claimant, or appellant; the applicable VA file number; and 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 agency of original jurisdiction (AOJ) within 30 days of its execution. 38 C.F.R. § 14.636(g). Agents and attorneys may charge claimants or appellants for representation provided after a AOJ has issued notice of an initial decision on the claim or claims if the notice of the initial decision was issued on or after the effective date of the modernized review system, 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). An initial decision on a claim would include an initial decision on an initial claim for an increase in rate of benefit, an initial decision on a request to revise a prior decision based on clear and unmistakable error (CUE), and an initial decision on a supplemental claim that was presented after the final adjudication of an earlier claim. However, a supplemental claim will be considered part of the earlier claim if the claimant has continuously pursued the earlier claim by filing any of the following, either alone or in succession: A request for higher-level review, on or before one year after the date on which the AOJ issued a decision; a supplemental claim, on or before one year after the date on which the AOJ issued a decision; a notice of disagreement (NOD), on or before one year after the date on which the AOJ issued a decision; a supplemental claim, on or before one year after the date on which the Board issued a decision; or a supplemental claim, on or before one year after the date on which the United States Court of Appeals for Veterans Claims (Court) issued a decision. Agents and attorneys may charge fees for representation provided with respect to a request for revision of a decision of an AOJ or the Board based on CUE if notice of the challenged decision on a claim or claims was issued on or after the effective date of the modernized review system, 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)(1). 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). Agents and attorneys may charge fees for representation provided with respect to a request for revision of a decision of an AOJ or the Board based on CUE if notice of the challenged decision was issued before the effective date of the modernized review system; an NOD was filed with respect to the challenged 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). Fees which do not exceed 20 percent of any past-due benefits awarded shall be presumed to be reasonable if the agent or attorney provided representation that continued through the date of the decision awarding benefits. 38 C.F.R. § 14.636(f)(1). 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 Veteran executed a VA Form 21-22a appointing the appellant as his representative in December 2015. The Veteran and the appellant also executed a fee agreement in December 2015 that states that the appellant is entitled to a fee of 20 percent of any past-due benefits awarded, paid directly by VA. The fee agreement includes the name of the Veteran, his VA file number, and specific terms under which the amount to be paid for the services of representation would be assessed. A copy of the agreement was received by VA in December 2015. Accordingly, the Board finds the agreement to be valid, as it was properly filed with VA and contains all required information in accordance with § 14.636(g). An October 2017 rating decision granted service connection for posttraumatic stress disorder (PTSD) with major depressive disorder and assigned a 100 percent rating, effective December 7, 2015. The Veteran filed a timely NOD as the effective date of the award of service connection in October 2017. He perfected an appeal to the Board, and in October 2018, the Board remanded the issue. Subsequently, in January 2019, the Veteran opted into the modernized review systems by submitted a Rapid Appeals Modernization Program (RAMP) election form and selecting the supplemental claim lane. The AOJ issued a RAMP supplemental claim decision in September 2019 that granted a 100 percent rating for PTSD with major depressive disorder, effective August 15, 2007. In an October 2019 fee decision, the AOJ found that the appellant was entitled to attorney fees based on the past-due benefits awarded in the September 2019 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 $233,169.90. The amount withheld for fees was $46,633.98, 20 percent of that amount. The appellant timely filed a VA Form 10182 in December 2019 to the fee decision, arguing that additional attorney fees were warranted. The Board initially finds that the appellant is eligible for attorney fees. The initial decision was issued prior to the effective date of the modernized review system, a timely NOD was filed on the issue, and the appellant represented the Veteran during the appeal; additionally, a valid VA Form 21-22a and fee agreement are of record. Therefore, 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 past-due benefits, which is presumed to be reasonable. In his December 2019 VA Form 10182, the appellant asserted that the amount of fees was calculated incorrectly because the retroactive payment of $233,169.90 was offset by nonservice-connected pension the Veteran had been receiving. The appellant asserted that the 20 percent of attorney fees should have been calculated from the gross, pre-offset retroactive award. A September 2019 fee calculation spreadsheet indicates that fees were calculated from September 1, 2007 to September 17, 2019. The amount previously paid to the Veteran from September 1, 2007 to September 17, 2019 was $192,314.44. The amount due to the Veteran following the grant of benefits in the September 2019 rating decision was $425,484.34. The RO found that there was an underpayment of $233,169.90 ($425,484.34 minus $192,314.44), which was the amount of past-due benefits due to the Veteran. The RO found that 20 percent of that amount was $46,633.98. In this case, the Board finds that the period used to calculate the attorney fees was correct. The fees were correctly calculated from September 1, 2007, the first month after the effective date of the award, through September 17, 2019, 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 the claim for an earlier effective date for the award of service connection for PTSD with major depressive disorder, the Veteran had already received VA benefits in the form of 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 PTSD with major depressive 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 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 compensation as determined by the claimant's disability rating beginning 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. 32 Vet. App. at 264. 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. Here, 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 an earlier effective date for the award of service connection for PTSD with major depressive 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, 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. Moreover, the Board acknowledges the appellant's contention that the issue is not a simultaneously contested claim. However, the Board finds that the issue is a contested claim. A "simultaneously contested claim" is defined as a claim where one claim is allowed, and one is rejected. 38 U.S.C. § 7105A. A "simultaneously contested claim" is further defined as the situation in which the allowance of one claim results in the disallowance of another claim involving the same benefit or the allowance of one claim results in the payment of a lesser benefit to another claimant. 38 C.F.R. § 20.3(l). When a fee is paid to an attorney or agent, then the award is taken from the Veteran's benefits. As the attorney fees are taken out of the past-due benefits, the past-due benefits award is essentially reduced. If a payment is made based on the past-due benefits, it would be reduced by the amount of attorney fees. Therefore, the allowance of one claim results in the payment of a lesser benefit to another claimant, and the claim is a contested claim. Accordingly, the appeal before the Board constitutes a contested claim. In sum, the appellant is eligible for attorney fees based on the past-due benefits awarded in the September 2019 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 September 2019 rating decision are not warranted. Accordingly, the claim is denied. S. HENEKS Veterans Law Judge Board of Veterans' Appeals Attorney for the Board C. Robinson, Associate 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.