Citation Nr: 21009643 Decision Date: 02/23/21 Archive Date: 02/23/21 DOCKET NO. 14-17 161 DATE: February 23, 2021 ORDER Payment of a reduced amount of agent fees of $372.36, but no higher, minus administrative fees, is granted. FINDINGS OF FACT 1. The Veteran’s appointment of the Appellant as his agent from August 2012 to April 2013, and the August 2012 fee agreement, are valid. 2. Following the issuance of a May 2009 rating decision, VA received the Veteran’s notice of disagreement (NOD) as to the issue of entitlement to an increased rating for service-connected diabetes mellitus, type II (diabetes) and related complications in January 2010. 3. In a March 2013 rating decision, the Agency of Original Jurisdiction (AOJ) granted an increased rating for diabetes and separate ratings for multiple complications, from which the past-due benefits awarded are contested. 4. The Appellant provided approximately 2 percent of the work that contributed to the award of past-due benefits by providing consultation, reviewing the claims file, and filing a claim for a total disability rating based on individual unemployability (TDIU); the minimal and brief nature of appellant’s work was not performed at a complex stage, and did not require much skill or time to complete. CONCLUSIONS OF LAW 1. The criteria for eligibility for agent fees based on past-due benefits awarded in the March 2013 rating decision have been met. 38 U.S.C. § 5904; 38 C.F.R. §§ 14.631, 14.636. 2. The requirements for payment of agent fees in the reduced amount of $372.36, but no higher, have been met. 38 U.S.C. § 5904; 38 C.F.R. §§ 14.631, 14.636. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty from October 1967 to October 1969. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a March 2013 decision issued by a Department of Veterans Affairs (VA) Regional Office (RO), which denied direct payment of withheld agent fees in the amount of $18,617.89, which represents 20 percent of the amount of past-due benefits awarded to the Veteran in a March 2013 rating decision. The Appellant is the Veteran’s former agent representative. In January 2016, the Appellant and the Veteran testified at a Board hearing before the undersigned Veterans Law Judge. A transcript of the hearing has been associated with the record. In August 2016, the Board remanded the case for referral to VA’s Office of General Counsel (OGC) for initial review of the fee agreement, which was completed in December 2020. The case now returns for further appellate review. Entitlement to payment of agent fees. Legal Criteria 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. 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 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 an AOJ has issued notice of an initial decision on the claim or claims, a 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). 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. 38 C.F.R. § 14.636(c)(1). When a claimant or appellant and an agent or attorney 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 agent or 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 agent or 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 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 the 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 agent or attorney based on the amount of past-due benefits awarded regardless of the amount payable to the Veteran. Rosinski v. Wilkie, 32 Vet. App. 264 (2020); Gumpenberger v. Wilkie, 973 F.3d 1379 (Fed. Cir. 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). 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. The presumption of reasonableness may be rebutted through an examination of the factors in 38 C.F.R. § 14.636(e) establishing that there is clear and convincing evidence that a fee which does not exceed 20 percent of any past-due benefits awarded is not reasonable. 38 C.F.R. § 14.636(f). Factors considered 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; (8) whether, and to what extent, the payment of fees is contingent upon the results achieved. 38 C.F.R. § 14.636(e). Facts In August 2012, the Veteran executed VA Form 21-22a appointing the Appellant as his representative. The parties also executed a Fee Agreement at that time, which provided that the Appellant was entitled to 20 percent of any past-due benefits awarded to the Veteran. Earlier, in May 2009, the RO granted service connection for diabetes with an evaluation of 10 percent, effective November 25, 2008. At such time, the Veteran’s combined schedular rating was 60 percent as of October 7, 2008. In January 2010, the Veteran timely filed a NOD with that rating decision, seeking an increased rating for his diabetes, and separate ratings for complications of diabetes. In a March 2013 rating decision, the AOJ granted an earlier effective date of October 7, 2008, for the award of service connection for diabetes and an increased rating of 20 percent, effective December 24, 2009. The AOJ also awarded separate ratings for various diabetic complications, to include peripheral vascular disease (PVD) of the bilateral lower extremities, peripheral neuropathy of the bilateral upper and lower extremities, and bilateral cataracts as of October 7, 2008. Ultimately, the awards resulted in a combined 100 percent schedular rating as of October 7, 2008. In a March 2013 fee decision, the RO determined that, although $18,617.89 (20 percent of the past-due benefits awarded in the March 2013 decision) was being withheld for potential agent fees, the requirements for direct payment of that fee had not been met. The notification explained that, while the Appellant submitted an application completed by the Veteran for a TDIU, the issue of TDIU was not on appeal and the Appellant did not perform services for the Veteran on the diabetes claim from which past-due benefits were granted. The Appellant timely filed a NOD in March 2013 as to the fee decision, asserting agent fees are warranted as a result of the March 2013 rating decision. He acknowledged that the TDIU was not at issue in the rating decision, but his services were directed towards assisting the Veteran in reaching a 100 percent rating, whether on a schedular basis or by a TDIU. The Appellant stated that VA failed to consider various services that he provided to the Veteran that included a comprehensive file review, monitoring the status of the file, and counseling on the process with emotional support. He further argued that VA had not rebutted the presumption in 38 C.F.R. § 14.636(f) that a 20 percent fee is reasonable. In April 2013, the Veteran was notified of the Appellant’s NOD and, later that month, he revoked the Appellant’s representation. VA sent the Appellant notification of the revocation of his representation to his address of record in June 2013. Ultimately, the Appellant perfected his appeal and both parties testified at a January 2016 Board hearing. At such time, the Appellant asserted that the fee agreement was valid, and he provided services including review of the claims file at the RO, strategy to assist the Veteran in reaching a 100 percent disability rating, monitoring of the case, and meeting with the Veteran to provide consultation and counsel. Upon requesting whether he wished to submit evidence of the work performed, the Appellant indicated that he did not keep records, relying on the regulation that 20 percent for agent fees is presumed reasonable. The Veteran acknowledged meeting with the Appellant two times, and speaking with him possibly three to four times. He stated that the Appellant indicated to him that he had looked at his file two times, and they only discussed the TDIU claim. Following the Board’s August 2016 remand, the parties were provided the opportunity to respond to the OGC’s motion to review the fee agreement. The Appellant provided a response in June 2017, with similar arguments of providing advocacy, counsel, strategy, research, and emotional support. He additionally noted that he prepared argument in case the matter was appealed to the Board, and the Veteran did not terminate his services until after the claim was decided. The Veteran’s rebuttal disputed that the Appellant provided most of the claimed services, particularly with respect to the appealed claim pertaining to the rating for his diabetes and various complications, and indicated that he discovered that the Appellant had only inquired into his file with the VA once. After review of the evidence, in December 2020, OGC determined that the presumption of reasonableness of 20 percent for agent fees was rebutted by clear evidence to the contrary, and 2 percent of the past-due benefits awarded in the March 2013 rating decision was a reasonable fee for the Appellant’s services. Analysis Two issues have been raised in this case, the first is whether the Appellant is eligible for agent fees, and the second is whether the agent fee of 20 percent of the past-due benefits granted in the March 2013 rating decision is reasonable and fairly reflects the Appellant’s contribution to the case. At the outset, the Board finds that it has jurisdiction over the matter of eligibility and reasonableness of agent fees. The Appellant again raised the argument in his June 2017 response to the OGC motion that the fee agreement was not within the Board’s jurisdiction. As previously determined in the August 2016 Board remand, 38 C.F.R. § 14.636(i) allows for permissible review of the reasonableness of the fee agreement by OGC, which was completed in December 2020. However, such does not deprive the Board of jurisdiction, and 38 U.S.C. § 5904(c)(3) specifically provides that the Board, in its appellate capacity, may review a fee agreement. The Board finds that the Appellant is eligible to agent fees based on the past-due benefits granted in the March 2013 rating decision. In this regard, a timely NOD was filed in January 2010 as to the issue addressed in the March 2013 rating decision. As the NOD was filed with respect to such issue on or after June 20, 2007, and the agent 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), the criteria for basic eligibility for agent fees are met. See 38 C.F.R. § 14.636. Additionally, while the Veteran has the right to discharge an agent or attorney, and he revoked the Appellant’s representation in April 2013, he only did so after the issuance of the favorable March 2013 rating decision. Termination of representation does not terminate the agent’s rights under a valid contract, i.e., the 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). Thus, the evidence supports that the fee agreement was valid, and the Appellant is eligible for agent fees. Next, the Board must next determine whether the presumption of reasonableness is rebutted by clear and convincing evidence by considering the eight factors in 38 C.F.R. § 14.636(e). With regard to factors 1 (the extent and type of services the representative performed), and 4 (the amount of time spent on the case), the record shows that the Appellant represented the Veteran from August 2012 until April 2013. This amounts to approximately eight months out of the four and a half years that the claim was pending, i.e., from the date of submission until it was granted. During those eight months, the record reflects only one service provided by the Appellant: the filing of the TDIU application drafted by the Veteran. He did not take any action with respect to the Veteran’s claim for an increased rating for diabetes and related complications. The Appellant has contended that he provided additional services of case monitoring, advocacy, counseling, strategy, research, emotional support, and preparation of argument in case the matter was appealed to the Board; however, such assertions are broad and vague in nature, and he has not provided any documentation evidencing those efforts. Nonetheless, at the January 2016 Board hearing, the Veteran acknowledged that he met with the Appellant two times, and spoke to him possibly three to four times. Review of factors 2 (complexity of the case), 3 (level of skill and competence required), and 6 (level of review the claim was taken and at which the agent was retained), tends to weigh against the award of fees to the Appellant. The Appellant was retained years after the Veteran filed his NOD regarding his claim for an increased rating for diabetes and related complications, and the Appellant did not assist the Veteran in substantiating such claim. Rather, he chose to only focus on the filing of an application for TDIU. Moreover, the Veteran’s claim, which resulted in the award of a 100 percent schedular rating, was granted prior to an appeal to the Board was necessary. Thus, the case was not of great complexity and only required minimal skill during the period of the Appellant’s representation. Factors 5, 7, and 8 address the results the representative achieved, rates charged by other representatives for similar services, and to what extent the payment of fees is contingent upon the results achieved. The Veteran and the Appellant entered into a fee agreement in August 2012 that stated that the Appellant was entitled to 20 percent of any past-due benefits awarded, which is the standard fee of attorneys and agents who represent claimants before VA. The August 2012 fee agreement based the award of any fees to Appellant on the award of past-due benefits to the Veteran. Therefore, the Appellant would not receive any fees for his work unless the Veteran was awarded past-due benefits. The payment of fees was, therefore, contingent on the results the Appellant achieved for the Veteran and required that he successfully obtain past-due benefits in order to be paid for his work. However, as the Appellant did not supply further documentation of his efforts, the record indicates his sole service in support of the Veteran’s pursuit of increased benefits was the filing of a TDIU application that was completed by the Veteran. As the TDIU claim was not addressed in the favorable March 2013 rating decision, he had minimal, if any, responsibility for this award. Based on the foregoing, the Board finds that there is clear and convincing evidence to rebut the presumption that a fee of 20 percent of past-due benefits is reasonable. Tending to weigh against the reasonableness of such fee, the Appellant only represented the Veteran for a short period of time, the case was not of great complexity, and his work did not impact the ultimate award of past-due benefits granted in the March 2013 rating decision. Rather, the Appellant contributed to the award by providing consultation, review of the claims file, and the filing of a TDIU claim. Consequently, the Board is in agreement with OGC’s December 2020 determination, and finds that a reduced amount would more fairly reflect the Appellant’s contribution to the case pursuant to the foregoing eight factors. For these reasons, the Board finds that payment of 2 percent of agent fees in the amount of $372.36, but no higher, minus any administrative fees, is warranted. A. JAEGER Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board S. Morford, 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.