Citation Nr: A25035123 Decision Date: 04/16/25 Archive Date: 04/16/25 DOCKET NO. 240322-441671 DATE: April 16, 2025 ORDER Eligibility for the direct payment of attorney fees based on past-due benefits awarded to the Veteran pursuant to a February 2024 rating decision is granted. FINDINGS OF FACT 1. The Veteran's July 2023 appointment of the Appellant as attorney and the associated July 2023 fee agreement between the Veteran and the Appellant are valid for purposes of the award of fees. 2. A September 2013 rating decision which granted service connection for rhinitis and a headache disability and assigned noncompensable (0 percent) disability ratings, both effective February 25, 2013, constitutes the initial decision on the matter of increased ratings for the service-connected rhinitis and headache disability (the "September 2013 Rating Decision"). 3. In October 2023, the Appellant submitted a VA Form 20-0995, Supplemental Claim, on behalf of the Veteran seeking review of the September 2013 Rating Decision as to the rating assigned for the Veteran's service-connected rhinitis, and a November 2018 Rating Decision as to the rating assigned for the Veteran's service-connected headache disability (the "October 2023 Supplemental Claim"). 4. In a February 2024 rating decision, based on the October 2023 Supplemental Claim, the Veteran was awarded (1) an increased rating of 30 percent for the service-connected headache disability, effective November 21, 2023; (2) an increased rating of 10 percent for the service-connected rhinitis, effective November 21, 2023; and (3) eligibility for Dependents' Educational Assistance under 38 U.S.C. Chapter 35 (DEA benefits), effective November 21, 2023 (the "February 2024 Rating Decision"). CONCLUSION OF LAW The criteria for eligibility for attorney fees based on the past-due benefits awarded in the February 2024 Rating Decision have been met. 38 U.S.C. § 5904. REASONS AND BASES FOR FINDINGS AND CONCLUSION This matter comes before the Board of Veterans' Appeals (Board) on appeal from a February 2024 fee decision (the "February 2024 Fee Decision") issued by a Department of Veterans Affairs (VA) Agency of Original Jurisdiction (AOJ), which constitutes an initial decision on the issue of attorney fees; therefore, the modernized review system, governed by the Appeals Modernization Act (AMA), applies. The Appellant represents the Veteran before VA but does not represent the Veteran in the current matter, because the Appellant is the contesting claimant. In March 2024, the Appellant timely filed a VA Form 10182, Decision Review Request: Board Appeal (Notice of Disagreement) (the "March 2024 NOD") in response to the February 2024 Fee Decision on appeal and elected the Direct Review docket. In June 2024, the Veteran was provided with a redacted copy of the Appellant's March 2024 NOD pursuant to contested claims procedures (the "June 2024 Notice"); however, the Veteran has not filed a response to the March 2024 NOD or elected to change the docket. See 38 C.F.R. §§ 20.403, 20.404. Therefore, this contested claim remains on the Direct Review docket, and the Board may only consider the evidence of record at the time of the February 2024 Fee Decision on appeal and a brief or argument filed by the Veteran within thirty (30) days of the June 2024 Notice. See 38 C.F.R. §§ 20.301, 20.405. If evidence was associated with the claims file during a period of time when additional evidence was not allowed, the Board has not considered it in this decision. See 38 C.F.R. § 20.300. ATTORNEY FEES Eligibility for the direct payment of attorney fees based on past-due benefits awarded to the Veteran pursuant to the February 2024 Rating Decision is granted. The Appellant asserts that the direct payment of fees is warranted based upon the February 2024 Rating Decision which awarded (1) an increased rating of 30 percent for the service-connected headache disability, effective November 21, 2023; (2) an increased rating of 10 percent for the service-connected rhinitis, effective November 21, 2023, and (3) DEA benefits, effective November 21, 2023. After careful review, and for the reasons set forth below, the Board agrees and finds that the Appellant is eligible for the direct payment of fees based on past-due benefits awarded to the Veteran pursuant to the February 2024 Rating Decision, and the claim is granted. VA claimants are permitted to appoint an attorney or agent as representatives in connection with the prosecution of claims for VA benefits. See 38 U.S.C. § 5904. In order to appoint an attorney or agent as his or her representative, the claimant must submit a validly executed VA Form 21-22a, Appointment of Attorney or Agent as Claimant's Representative, which must meet the following requirements: (1) the form must be signed by (a) the claimant; (b) the claimant's guardian; or (c) in the case of an incompetent, minor, or otherwise incapacitated person without a guardian, the claimant's spouse, parent, other relative or friend (if interests are not adverse), or the director of the hospital in which the claimant is maintained; (2) the form must be signed by the attorney or agent providing representation; and (3) the form must be presented to the appropriate VA office for filing in the claims file. See 38 C.F.R. § 14.631(a). The claimant may revoke a power of attorney and discharge an agent or attorney at any time, and, unless specifically indicated otherwise, the receipt of a new VA Form 21-22 or VA Form 21-22a executed by the claimant and the representative shall constitute revocation of an existing power of attorney. See 38 C.F.R. § 14.631(f)(1). In order to be valid, all fee agreements between a claimant and an attorney or agent must be in writing, signed by both the claimant and the representative, and must include the following: (1) the name of the veteran; (2) if other than the veteran, the name of the claimant or appellant; (3) the name of any disinterested third-party payer and the relationship between the third-party payer and the veteran, claimant, or appellant; (4) the applicable VA file number; and (5) the specific criteria for determining the amount to be paid for the services of the attorney or agent. See 38 C.F.R. § 14.636(g); see also 38 U.S.C. § 5904(d). Fee agreements must also clearly specify whether VA shall pay the attorney or agent directly out of past-due benefits ("direct-pay fee agreement"). See 38 C.F.R. § 14.636(g)(2). A fee agreement that does not clearly specify that VA is to directly pay the attorney or agent out of past-due benefits or that specifies a fee greater than 20 percent of past-due benefits awarded by VA shall be considered to be an agreement in which the attorney or agent is responsible for collecting any fees for representation from the claimant without assistance from VA. See id. A copy of a direct-pay fee agreement must be filed with the AOJ within thirty (30) days of its execution. See 38 C.F.R. § 14.636(g)(3). A fee may not be charged, allowed, or paid for services of attorneys or agents with respect to services provided before the date on which a claimant is provided notice of the AOJ initial decision with respect to the case. See 38 U.S.C. § 5904(c)(1); see also Held v. McDonough, 37 Vet. App. 28, 32-34 (2023). 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 attorney or agent (i) is to be paid to the attorney or agent 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. See 38 U.S.C. § 5904(d). 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. See 38 C.F.R. § 14.636(h)(1), (2). Fees which do not exceed 20 percent of any past-due benefits awarded shall be presumed to be reasonable if the representation continued through the date of the decision awarding benefits. See 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 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. See 38 C.F.R. § 14.636(h)(3). Attorney or agent fees may be calculated based on the total amount of past-due benefits awarded to the veteran regardless of the amount actually paid to the veteran. See Rosinski v. Wilkie, 32 Vet. App. 264 (2020). Where the benefit granted on appeal or as the result of the readjudicated claim involves 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. See 38 C.F.R. § 14.636(h)(3)(i). The sum will equal the payments accruing from the effective date of the award to the date of the initial disability rating decision. See id. 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 attorney or agent represents the claimant or appellant in that phase of the claim, the attorney or agent 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. See 38 C.F.R. § 14.636(h)(3)(i). As an initial matter, the Board finds that the Appellant has been serving as the Veteran's duly appointed representative since July 2023, when the Veteran executed a VA Form 21-22a appointing the Appellant as representative, and the parties executed a fee agreement (the "July 2023 Fee Agreement") providing that the Appellant would be entitled to the direct payment of fees in the amount of 20 percent of any past-due benefits awarded by VA. As the record reflects that the July 2023 VA Form 21-22a and Fee Agreement comply with the applicable VA regulations as set forth above, the Board finds that both are valid for purposes of the award of fees. See 38 C.F.R. §§ 14.627, 14.631, 14.636. The Board further finds that the September 2013 Rating Decision which granted service connection for rhinitis and a headache disability and assigned noncompensable ratings for each disability constitutes the initial decision on the matter of increased ratings for the Veteran's service-connected rhinitis and a headache disability. See 38 U.S.C. § 5904(c)(1); Held v. McDonough, 37 Vet. App. 28, 32-33 (2023). In addition, the Board finds that the required contested claims procedures have been completed, as, in June 2024, the Veteran was provided a copy of the Appellant's redacted March 2024 NOD, and in July 2024, both the Veteran and the Appellant were provided additional notice that the March 2024 NOD was placed on the Board's direct review docket. See 38 C.F.R. §§ 20.403, 20.404. Regarding the nature of the services provided by the Appellant, the Appellant filed the October 2023 Supplemental Claim on behalf of the Veteran seeking review of the September 2013 Rating Decision's assignment of a noncompensable rating for the Veteran's rhinitis and of a November 2018 Rating Decision's continuation of the noncompensable rating assigned for the Veteran's headache disability. Thereafter, in the February 2024 Rating Decision, the Veteran was awarded (1) an increased rating of 30 percent for the service-connected headache disability, effective November 21, 2023; (2) an increased rating of 10 percent for the service-connected rhinitis, effective November 21, 2023; and (3) DEA benefits, effective November 21, 2023. The AOJ noted that new and relevant evidence had been received to readjudicate the claims but that continuous pursuit was required to award an effective date earlier than the date of receipt of the supplemental claim. In the February 2024 Fee Decision, the AOJ advised the parties that "[t]he notice of initial decision associated with this supplemental claim was prior to the AMA effective date of the modernized review system under 38 C.F.R. 14.636(c)(2)(i). Based upon the law in effect at the time the request for review was filed, direct payment of fees is denied." However, for the following reasons, the Board finds that the Appellant is eligible for the direct payment of fees in the amount of 20 percent of the past-due benefits paid to the Veteran pursuant to the February 2024 Rating Decision. First, the record reflects that the Appellant has complied with the power of attorney requirements, and that the July 2023 Fee Agreement is valid. See 38 C.F.R. §§ 14.627, 14.631, 14.636. Second, the September 2013 Rating Decision granted service connection for the Veteran's rhinitis and headache disability and assigned noncompensable ratings for both disabilities, which the Board finds constitutes the initial decision on the ratings assigned for the Veteran's service-connected rhinitis and headache disabilities. Third, the Appellant submitted a qualifying request for review; namely, the October 2023 Supplemental Claim on behalf of the Veteran, seeking ratings higher than those assigned in the 2013 and 2018 rating decisions, and attaching evidence the AOJ deemed new and relevant. See Military-Veterans Advocacy v. Sec'y of Veterans Affairs, 7 F.4th 1110, 1135-41 (Fed. Cir. 2021). Moreover, the fact that the October 2023 Supplemental Claim was submitted years after the decisions for which review was requested does not render it invalid for the purpose of eligibility for attorney fees. See Held, 37 Vet. App. at 32-33 (invalidating 38 C.F.R. §14.636(c)(2)(ii) as inconsistent with 38 U.S.C. § 5904(c)(1) and finding that representatives may be eligible for fees based on supplemental claims filed more than one year after the "initial decision with respect to the case"); Military-Veterans Advocacy v. Sec'y of Veterans Affairs, 7 F.4th at 1139 ("Restricting the effective date of § 5104C(b) supplemental claims simply reflects a legislative choice to award claimants who delayed seeking review of their claims for over a year fewer benefits than those who 'continuously pursued' administrative review. It says nothing of Congress's intent to restrict attorneys' fees or limit a claimant's ability to retain paid representation for § 5104C(b) supplemental claims."); see also 38 U.S.C. § 5904(c)(1). As a result of the October 2023 Supplemental Claim, the February 2024 Rating Decision awarded the Veteran (1) an increased rating of 30 percent for the service-connected headache disability; (2) an increased rating of 10 percent for the service-connected rhinitis; and (3) DEA benefits. Accordingly, in light of the foregoing, the Board finds that the criteria have been met for eligibility for direct payment of fees of 20 percent of the past-due benefits paid to the Veteran pursuant to the February 2024 Rating Decision, and the appeal is granted. See 38 U.S.C. § 5904. L. STEPANICK Veterans Law Judge Board of Veterans' Appeals Attorney for the Board H. Marsdale, 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.