Citation Nr: 21010452 Decision Date: 02/24/21 Archive Date: 02/24/21 DOCKET NO. 16-12 740 DATE: February 24, 2021 ORDER Attorney fees based on the grant of increased ratings for right and left upper extremity diabetic peripheral neuropathy in a January 2014 rating decision are granted. FINDINGS OF FACT 1. The Veteran’s appointment of K.L. as his attorney and the associated fee agreement are valid. 2. In the January 2014 rating decision, the RO granted the Veteran increased ratings for right and left upper extremity diabetic peripheral neuropathy for which a notice of disagreement (NOD) had been filed. 3. K.L. invested a reasonable amount of time and effort in pursuing the Veteran’s appeal regarding entitlement to increased ratings for the service-connected bilateral upper extremity diabetic peripheral neuropathy, such that would warrant the award of attorney fees. CONCLUSION OF LAW The criteria for entitlement to attorney fees based on past-due benefits from the January 2014 rating decision which granted increased ratings for right and left upper extremity diabetic peripheral neuropathy have been met. 38 U.S.C. § 5904 (2012); 38 C.F.R. § 14.636 (2020). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served in the U.S. Navy from November 1980 to November 2000. K.L. is the Veteran’s former attorney. This matter comes before the Board of Veterans’ Appeals (BVA or Board) on appeal from a February 2014 decision of the Department of Veterans Affairs (VA) Regional Office (RO), which awarded attorney fees to K.L. based upon the grant of increased ratings for bilateral upper extremity diabetic peripheral neuropathy in a January 2014 rating decision. In March 2014, the Veteran submitted a notice of disagreement (NOD) regarding the award of attorney fees to K.L., and ultimately certified his appeal to the Board. In a February 2019 decision, the Board denied the Veteran’s appeal regarding the propriety of the award of attorney fees based on the grant of increased ratings for the bilateral upper extremity diabetic peripheral neuropathy, finding that K.L. was entitled to the fees awarded in February 2014. In an April 2020 Memorandum Decision, the United States Court of Veterans Claims (Court) vacated the February 2019 Board decision as to this issue and remanded the claim to the Board for action consistent with the terms of the Court’s decision. Attorney fees based on the grant of increased ratings for right and left upper extremity diabetic peripheral neuropathy in a January 2014 rating decision are granted. A claimant may have attorney or agent representation for the prosecution of claims for VA benefits. 38 U.S.C. § 5904 (a). Attorneys and agents may charge claimants or appellants for representation before VA 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 or for an increase in rate of a benefit; an NOD has been filed with respect to that decision on or after June 20, 2007; and the attorney or agent 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)(1). Fees permitted for services of an agent or attorney admitted to practice before VA must be reasonable. They may be based on a fixed fee, hourly rate, a percentage of benefits recovered, or a combination of such bases. Factors considered in determining whether fees are reasonable include: the extent and type of services the representative performed; the complexity of the case; the level of skill and competence required of the representative in giving the services; the amount of time the representative spent on the case; the results the representative achieved, including the amount of any benefits recovered; the level of review to which the claim was taken and the level of the review at which the representative was retained; rates charged by other representatives for similar services; whether, and to what extent, the payment of fees is contingent upon the results achieved; and if applicable, the reasons why an agent or attorney was discharged or withdrew from representation before the date of the decision awarding benefits. 38 C.F.R. § 14.636 (e). Fee agreements which do not exceed 20 percent of past-due benefits are presumed to be reasonable. 38 C.F.R. § 14.636 (f). Where an attorney is dismissed prior to successful completion of the veteran’s claim, there is no presumption of reasonableness and the attorney is not automatically entitled to the full 20 percent fee. See Scates v. Principi, 282 F.3d 1362, 1366 (Fed. Cir. 2002). Instead, the attorney is entitled to a fee that fairly and accurately reflects his contribution to and responsibility for the benefits awarded. Id. Factors which may be relevant in such a determination include: the reason for termination of the attorney’s representation; whether the fee should be calculated by days spent on the case by the former attorney or the number of hours spent on the case as compared to hours spent by other representatives; whether the attorney can recover under another legal theory such as quantum meruit (Latin for “what is deserved”); whether the attorney can seek recovery from the veteran in another forum such as a state court; and whether any other representative is also seeking legal fees for services performed for the veteran in the case. Scates, 282 F.3d at 1368-69. Thus, when determining the reasonableness of an attorney fee, the Board must consider both the regulatory factors and the Scates factors. Lippman v. Shinseki, 21 Vet. App. 184, 189-90 (2007). 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). 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 claim reopened after a denial by a VA agency of original jurisdiction 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, as determined by applicable laws and regulations, and the date of the grant of the benefit by the agency of original jurisdiction, the Board, or an appellate court. 38 C.F.R. § 14.636 (h)(1). When the benefit granted on appeal, or as the result of the reopened claim, is service connection for a disability, the “past-due benefits” will be based on the initial disability rating assigned by the agency of original jurisdiction 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 agency of original jurisdiction, 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)(1)(i). The Veteran and K.L. entered into a valid attorney-client fee agreement in February 2010, and signed a VA Form 21-22a Appointment of Individual as Claimant’s Representative at that time. In February 2010, the Veteran filed a claim for service connection for diabetes. In a November 2010 rating decision, the RO granted service connection for, among other conditions, right and left upper extremity diabetic peripheral neuropathy with a 10 percent rating each. The effective date of the grants of service connection was February 24, 2010. In December 2010, K.L. filed an NOD on behalf of the Veteran regarding the ratings assigned for the right and left upper extremity diabetic peripheral neuropathy. In March 2012, the Veteran executed a VA Form 21-22 appointing Disabled American Veterans (DAV) as his representative. However, he did not notify K.L. of his change in representation at that time. In the January 2014 rating decision, the RO increased the Veteran’s right upper extremity diabetic peripheral neuropathy to 30 percent and left upper extremity diabetic peripheral neuropathy to 20 percent, effective February 24, 2010. In February 2014, the RO determined that K.L. was entitled to attorney fees based on past-due benefits awarded in the January 2014 rating decision. In February 2014, the Veteran filed an NOD regarding the award of attorney fees to K.L. In February 2015, VA recognized the Veteran’s March 2012 appointment of DAV as his representative and informed the Veteran that K.L. had continued to submit an old VA Form 21-22a “in an attempt to submit and request information from us in regards to your pending appeals. It appears he believes he still your representative for VA purposes.” In March 2015, K.L. stated that he was withdrawing as the Veteran’s representative and was not waiving any fees to which he may be entitled. The Veteran contends that K.L. did not assist in obtaining any benefits on his behalf and that he (with the help of his mother) did all of the paperwork and made all necessary appointments on his own. However, for the following reasons, the Board finds that K.L complied with the power of attorney requirements and the fee agreement provides for a fee equal to 20 percent of the total amount of any past-due benefits awarded. K.L. represented the Veteran in his claim for initial increased ratings for right and left upper extremity diabetic peripheral neuropathy. In December 2010, K.L. filed an NOD with the initial ratings assigned on behalf of the Veteran. The Veteran replaced K.L. as his representative with DAV in March 2012. However, it appears that K.L. was never informed of the change in representation by the Veteran and continued to submit documents and request updates on the status of the Veteran’s appeals until March 2015. The record reflects that K.L. requested a copy of the Veteran’s claims file in February 2010, presumably in an effort to further investigate and advance the appeal on his behalf. In January 2011, K.L. submitted medical evidence in support of the claim, and in December 2011 he submitted a statement provided by the Veteran. In December 2011 and May 2012, he requested updates regarding the status of the appeal. Notably, in June 2012, he sent a letter to the Veteran advising him of the current status of the claim and requesting that the Veteran notify him of any changes related to the appeal. As the Veteran had retained new counsel at that time, he was obligated to inform K.L. of this change in representative and failed to do so. Unaware of the Veteran’s appointment of DAV, K.L. continued to take reasonable steps in his representation of the Veteran. This included certifying the Veteran’s appeal regarding the increased ratings for the bilateral upper extremity peripheral neuropathy to the Board in January 2014, which is not currently on appeal. In a March 2014 letter, DAV acknowledged K.L.’s submission of the January 2014 VA Form 9 regarding the increased rating claim and determined that K.L. was still representing the Veteran in that matter. In June 2014, K.L. also requested an informal teleconference with a Decision Review Officer regarding the Veteran’s claim. All of these actions taken by K.L. clearly indicate that he continued to invest time and effort into developing the Veteran’s appeal. There is no dispute that K.L. actively pursued the appeal on the Veteran’s behalf, as he continued to monitor the status of the case and submit evidence in support of the claim. The record further indicates that he invested a reasonable amount of time in working on the Veteran’s appeal, such that would warrant the award of attorney fees in this matter. Indeed, K.L. went beyond solely submitting the December 2010 NOD, as alleged by the Veteran. His efforts are clearly documented in the claims file, which reflects that he submitted all necessary filings in a timely manner, requested status updates, and provided additional evidence in the form of medical records and lay statements on the Veteran’s behalf. As such, the Board has considered the amount of time and effort K.L. invested into the Veteran’s claim, and finds that the facts of this case reflect that he is entitled to the attorney fees awarded to him in February 2014. In determining reasonable attorney fees under the circumstances of this case, the standard is quantum meruit or as much as deserved, as noted above. The Board has considered the factors outlined in Scates, as well as the contentions advanced by the Veteran. The Board concludes that the payment of 20 percent from past-due benefits is not unreasonable or excessive within the broader scope of contingency fee-based legal representative of veterans. The Veteran willingly entered into a valid fee agreement in 2010 for such a payment and did not inform K.L. of his termination as representative for 3 years after he appointed a new representative. During that time, K.L. continued to act in a manner consistent with the responsibilities of a representative and invested time and effort into the appeal, as set forth in detail above. Additionally, the NOD filed by K.L. on the Veteran’s behalf resulted in the increased ratings for right and left upper extremity diabetic peripheral neuropathy. K.L. is, therefore, entitled to attorney fees for the increased ratings granted in the January 2014 rating decision as to those two disabilities. MICHAEL KILCOYNE Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board Erin J. Trojanowski, 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.