Citation Nr: A25054079 Decision Date: 06/23/25 Archive Date: 06/23/25 DOCKET NO. 240412-462594 DATE: June 23, 2025 ORDER Eligibility for the direct payment of attorney fees to the appellant from benefits resulting from past due benefits awarded in a February 2024 Rating Decision is granted. FINDINGS OF FACT 1. The June 2023 Rating Decision which denied special monthly compensation based on the criteria for the need for aid and attendance being met (SMC aid and attendance) is the initial decision on the claim for that benefit. 2. The appellant filed a relevant Appeals Modernization Act (AMA) Supplemental Claim in August 2023, resulting in the February 2024 grant of SMC aid and attendance, effective August 28, 2023. CONCLUSION OF LAW The criteria for eligibility for the direct payment of attorney fees to the appellant from benefits resulting from past due benefits awarded in a February 2024 Rating Decision have been met. 38 U.S.C. § 5904; 38 C.F.R. § 14.636. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty in the United States Army from September 1968 to March 1970. The appellant is the Veteran's former attorney. The fee decision on appeal was issued in February 2024 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 an April 2024 VA Form 10182, Decision Review Request: Board Appeal (NOD), the appellant elected the Direct docket. Therefore, the Board may only consider the evidence of record at the time of the agency of original jurisdiction (AOJ) decision on appeal. 38 C.F.R. § 20.301. Pursuant to contested claims procedures, a redacted copy of the appellant's substantive appeal was sent to the Veteran's address on file, and docketing letters dated August 2024 and October 2024 were sent to the Veteran and to the appellant. Payment of Attorney Fees A claimant may have attorney or agent representation for the prosecution of claims for VA benefits. 38 U.S.C. § 5904 (a). Under 38 C.F.R. § 14.636 (g)(1), all fee agreements must include the name of the Veteran, 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. 38 C.F.R. § 14.636 (g)(2). 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)(3). Fee agreements must be reasonable; those which do not exceed 20 percent of past-due benefits are presumed reasonable. See 38 C.F.R. § 14.636 (e), (f). When a claimant 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 or not the matter is resolved in a manner favorable to the claimant, 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 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). Under VA regulations, 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 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, as determined by applicable laws and regulations, 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)(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 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 evaluation is subsequently granted as the result of an appeal of the disability evaluation 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)(1)(i). Eligibility for the direct payment of attorney fees to the appellant from benefits resulting from past due benefits awarded in a February 2024 Rating Decision Under the AMA, agents or attorneys may charge claimants fees for representation once: " the agent or attorney has complied with regulatory power of attorney (POA) and fee agreement requirements. " an AOJ has issued notice of an initial decision on a claim, and " the initial decision was on a claim on or after February 19, 2019 (the effective date of the modernized decision review system). See 38 C.F.R. § 14.631; 38 C.F.R. § 14.636 (g). An "initial decision on a claim" is the result of a valid appeal. It includes an initial decision on a request to revise a prior decision based on clear and unmistakable error (CUE); a decision on an initial claim for an increase in rate of benefit; or, as relevant to this appeal, an initial decision on a supplemental claim that was submitted after the final adjudication of an earlier claim. 38 C.F.R. § 14.636 (c)(1)(i). In this case, the appellant is eligible for the direct payment of attorney fees to the appellant from benefits resulting from the February 2024 grant of past-due benefits. Specifically, the pre-decisional evidence of record shows that the requirements for withholding of attorney fees for the appellant have been met. See Cox v. McDonough, 4 Vet. App. 112 (2021). First, the appellant complied with the regulatory POA and fee agreement requirements. Specifically, he executed a valid VA Form 21-22a in January 2023. The claimants' Fee Agreement was also executed and filed in January 2023. Pursuant to 38 U.S.C. § 5904 (d)(2), the Fee Agreement provides for direct payment of 20 percent of past-due benefits. Second, the AOJ granted SMC based on a claim filed by the appellant on the Veteran's behalf that the Board finds is a valid Supplemental Claim. As a matter of procedural history, the AOJ granted service connection for a right eye injury in a May 1970 Rating Decision, assigning a rating of 40 percent from March 4, 1970, and a SMC rating for loss of use of the right eye from March 4, 1970. In July 1990, the AOJ denied a rating in excess of 40 percent for a right eye injury, which was also denied in a subsequent April 1991 Statement of the Case (SOC), a January 1991 Rating Decision. In September 1991, the Veteran gave testimony about the severity of his symptoms; the 40 percent rating was continued in a November 1991 Supplemental Statement of the Case, and in a September 1991 Rating Decision, service connection was granted for acne vulgaris of the face, chest, and back, and a 10 percent rating assigned from May 4, 1970. In April 1992, the AOJ issued a Rating Decision in which it granted service connection for a right facial scar assigning a noncompensable rating from June 14, 1989 and a temporary total evaluation from June 14, 1989 through July 31, 1989. Meanwhile, the AOJ issued a Rating Decision in July 1993 in which it granted service connection for PTSD, assigning a rating of 10 percent. In a final January 1994, the AOJ issued a Rating Decision in which it granted a 50 percent rating for PTSD effective July 31, 1991. In February 2002, the AOJ issued a Rating Decision in which it denied the Veteran's March 2001 claim for a rating in excess of 50 percent for PTSD. The Veteran filed timely Notice of Disagreement (NOD) in March 2002 and in December 2002, the AOJ issued a Rating Decision in which it granted a 70 percent rating for PTSD effective March 29, 2001. In his March 2002 claim, the Veteran also included a service connection claim for a left eye injury, and an increased rating claim for his right eye injury. In June 2003, the AOJ issued a Rating Decision in which it awarded a 10 percent rating for the Veteran's right facial scar and denied service connection for a left eye injury. In June 2003, the AOJ received the Veteran's increased rating claim for his right eye. In January 2004, the AOJ received the Veteran's VA 21-8940 Veterans Application for Increased Compensation Based on Unemployability (TDIU) in which he stated that he was unable to secure and follow substantially gainful employment due to service-connected PTSD. In March 2004, the AOJ issued a Rating Decision awarding a 30 percent rating for right facial scar effective April 29, 2003, and denied a rating in excess of 40 percent for a right eye injury. Subsequently, in a final June 2004 Rating Decision, the AOJ awarded entitlement to TDIU and DEA effective December 17, 2003, but denied a rating in excess of 70 percent for PTSD. In August 2006, the Veteran submitted a claim pertaining to his eyesight in both his eyes. In April 2007, the AOJ issued a Rating Decision in which it denied a rating in excess of 40 percent for a right eye injury and denied service connection for a left eye disorder secondary to right eye injury. In a final October 2008 Rating Decision, the AOJ denied service connection for sleep apnea. In a final June 2009 Rating Decision, the AOJ denied a new May 2009 increased rating claim for a rating in excess of 70 percent for PTSD. In February 2011, the AOJ received the Veteran's service connection claim for disorders of the back and neck and a skin condition as due to Agent Orange exposure. The AOJ issued an August 2012 Rating Decision in which it denied a rating in excess of 10 percent for acne vulgaris. While the Veteran's timely NOD was received, the AOJ did not receive a substantive appeal of the April 2014 SOC, and so the August 2012 Rating Decision became final. Furthermore, in February 2014, the AOJ received the Veteran's withdrawal of all pending claims. In January 2016, the AOJ received the Veteran's VA 21-526EZ, Fully Developed Claim to service connection for a heart disability and increased rating for acne vulgaris. In July 2016, the AOJ granted service connection for coronary artery disease status post coronary artery bypass graft and ischemic heart disease associated with herbicide exposure (a heart disability), assigning a rating of 60 percent from January 15, 2016. It also granted service connection for an anterior chest scar, a residual of CABG surgery, assigning a rating of noncompensable from January 15, 2016, and denied a rating in excess of 10 percent for acne vulgaris. Notably, the AOJ, in this rating decision, granted entitlement to special monthly compensation based on housebound criteria being met (SMC housebound) from July 22, 2009. The AOJ granted SMC housebound because the Veteran's TDIU rating was based solely on his PTSD, and his ratings for the right eye, left upper arm, anterior chest, right facial scar, and acne vulgaris scar, left upper arm, anterior chest scar, right facial scar, and acne vulgaris combined to at least 60 percent. In April 2018, the AOJ issued a Rating Decision proposing to discontinue the Veteran's TDIU rating and, consequently, reduce the Veteran's SMC level to K-1 based on the anatomical loss of use of one eye. The AOJ based this proposal on the Veteran's not having completed the requested VA 21-4140-1 Employment Questionnaire to continue his TDIU rating. However, the Veteran corresponded with the AOJ in May 2018, informing them that he would complete the questionnaire, as a result of which the TDIU rating was continued. Accordingly, in an August 2018 Rating Decision, the AOJ continued the Veteran's TDIU rating and his SMC housebound rating. In October 2020, the AOJ received the Veteran's VA 21-526EZ, Fully Developed Claim to special monthly compensation based on the criteria for the need for aid and attendance being met (SMC aid and attendance). In an October 2020 Rating Decision, the AOJ continued the Veteran's SMC level "at its current rate;" in other words, the AOJ denied the Veteran's claim for SMC aid and attendance. In January 2021, within a year of the October 2020 Rating Decision, the AOJ received the Veteran's VA Form 20-0996 Request for Higher-Level Review. In April 2021, the AOJ issued a Rating Decision again denying SMC aid and attendance. After retaining the appellant, the Veteran, through the appellant, submitted VA Form 20-0995 Supplemental Claim Application in March 2023. Along with this application, the appellant submitted evidence of the Veteran's need for aid and attendance of another person. In June 2023 the AOJ issued an AMA Rating Decision denying SMC aid and attendance. On August 28, 2023, the AOJ received, through the appellant as counsel, the Veteran's VA 21-2680 Examination for Housebound Status or Permanent Need for Regular Aid and Attendance. In February 2024, the AOJ issued a Rating Decision granting SMC aid and attendance, assigning an effective date of August 28, 2023. In a February 2024 fee decision, the AOJ denied direct payment of fees. The appellant filed a timely VA Form 10182 seeking fees from the past-due benefits granted in the February 2024 Rating Decision. In Chisholm v. Collins, No. 22-7028 (Vet. App. March 13, 2025), the Court of Appeals for Veterans' Claims (Court) held that while a supplemental claim must be filed on a form prescribed by VA, it need not be filed on the VA Form 20-0995 in particular, and because a request for TDIU is not a standalone claim but an attempt to get a higher rating, a VA Form 21-8940 may serve as a supplemental claim when filed after VA has denied higher ratings for the disabilities at issue. The Court stated that the regulation dealing with supplemental claims states that the claimant may file a supplemental claim "on a form prescribed by the Secretary." 38 C.F.R. § 3.2501 (2024). The Court continued to say that, "[W]hen used as an indefinite article, 'a' means '[s]ome undetermined or unspecified particular.' McFadden v. United States, 576 U.S. 186, 191 (2015) (quoting WEBSTER'S NEW INTERNATIONAL DICTIONARY 1 (2d ed. 1954)). Thus, these regulations are best read as requiring the claimant to use an unspecified form prescribed by the Secretary, not a specific form prescribed by the Secretary, when filing a supplemental claim." In this case, the Board finds that direct payment of fees is warranted because the February 2024 Rating Decision was issued after the initial decision on the claim for SMC aid and attendance. Specifically, the August 2023 VA 21-2680 can be considered a supplemental claim in this case. In Chisholm, the Court held that the VA Form 21-8940, a form prescribed by the Secretary, that Mr. Chisholm filed on behalf of his client in that case was a supplemental claim. The Court reasoned that in a VA Form 21-8940, a veteran is, necessarily, seeking a 100 percent rating for all disabilities that the Veteran attests are reasons for his or her unemployability. Chisholm at 13. The Court also reasoned that because the veteran in that case had filed a VA Form 21-8940 within one year of the prior decision, the claim was continuously pursued and should be considered supplemental to the prior decision. Chisholm at 15. In this case, the Veteran's intent in submitting the Secretary-prescribed form, in this case VA Form 21-2680, is the same as his intent in submitting the claim denied in June 2023, SMC aid and attendance. In the VA Form 21-2680, the appellant sought SMC aid and attendance, which, per Chisholm, is the same claim that the appellant asserted, on behalf of the Veteran, on the same basis, in March 2023, and was denied in June 2023. Indeed, the August 2023 VA Form 21-2680 was received within a year of the June 2023 initial Rating Decision denying the same claim, SMC aid and attendance. Given the appellant's continuous pursuit of the Veteran's claim for SMC aid and attendance, based on the Veteran's need for aid and attendance due to service connected disabilities, and filing of VA Form 21-2680 within one year of the June 2023 initial decision seeking SMC aid and attendance due to the combination of the Veteran's service connected disabilities, to include his right eye disability, heart disability, and PTSD, the Board finds that VA Form 21-2680 can, in this instance, be considered a supplemental claim. Furthermore, that supplemental claim resulted in the February 2024 grant of the same benefit. Accordingly, direct payment of attorney fees is warranted for the February 2024 decision granting SMC aid and attendance. Attorney fees from the February 2024 grant of SMC aid and attendance should therefore be withheld for the appellant in this case for direct payment from VA. Danette Mincey Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Maskatia, Zaheer 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.