Citation Nr: 0004201 Decision Date: 02/16/00 Archive Date: 02/23/00 DOCKET NO. 96-39 626 ) DATE ) ) THE ISSUE Eligibility for payment of attorney fees from past-due benefits, resulting from an April 1996 rating decision granting entitlement to a total disability rating based on individual unemployability (TDIU). (The issues of clear and unmistakable evidence in a June 1990 Board decision denying service connection for an acquired psychiatric disorder, to include PTSD, and an earlier effective date for a TDIU will be the subjects of separate appellate decisions). ATTORNEY FOR THE BOARD W. R. Steyn, Associate Counsel INTRODUCTION The veteran had active military service from August 1968 to May 1970. This matter relating to attorney fees is before the Board of Veterans' Appeals (Board) following proceedings at the Newark, New Jersey, Regional Office (RO) of the Department of Veterans Affairs (VA) relating to claims by the veteran for VA benefits. The claimant in the present case is an attorney who was retained by the veteran after a July 21, 1992, Board decision which determined that new and material evidence had not been submitted in order to reopen a claim of entitlement to service connection for post-traumatic stress disorder (PTSD). The claimant appealed the veteran's claim to the United States Court of Appeals for Veterans Claims (known as the United States Court of Veterans Appeals prior to March 1, 1999) (hereinafter, "the Court"). In April 1993, the veteran's attorney and VA's Office of General Counsel filed a joint motion requesting that the Court vacate the Board's July 1992 Board decision. On April 23, 1993, the Court granted the motion and vacated and remanded the case to the Board. In December 1993, the Board remanded the case to the RO for development of the medical evidence regarding the veteran's claim for service connection for PTSD. On January 17, 1995, a rating board awarded service connection for PTSD and assigned a 30 percent rating from August 29, 1990. A claim for a TDIU was denied. The grant of service connection for PTSD and assignment of a 30 percent rating created past due benefits, a portion of which were withheld for payment of attorney fees, which were paid to the attorney. In April 1995, the veteran filed a notice of disagreement with the effective date of the award of service connection for PTSD, the amount of the rating, and the denial of a TDIU. After additional development of the evidence, the RO granted the veteran a TDIU by rating decision dated April 17, 1996, resulted in the granting of a total rating from August 29, 1990, and creation of additional past due benefits. By decision dated November 12, 1996, the Board determined that the attorney was not eligible to charge a fee for legal services provided to the veteran with respect to the claim for a TDIU. The claimant appealed such decision to the Court, and on November 1, 1999, the Court reversed the November 1996 Board decision. The Court held that the TDIU claim was raised by the evidence of record as an underlying issue in the PTSD claim appealed to the Court back in April 1993, and that the past-due benefits awarded based on the TDIU were part of the "initial rating", rendering the claimant eligible for fees. The Court remanded the matter to the Board for calculation of fees due to the claimant. In its November 1996 decision, the Board referred the issues of entitlement to a rating in excess of 30 percent for PTSD and an earlier effective date for the 30 percent rating for PTSD for appropriate development. As these issues have yet to be developed, they are again referred to the RO for appropriate development. FINDINGS OF FACT 1. A Board decision on July 21, 1992, determined that new and material evidence had not been submitted in order to reopen the veteran's claim for service connection for PTSD. 2. By order dated April 23, 1993, the Court vacated and remanded the July 1992 Board decision. 3. The veteran's claim for a TDIU was raised by the evidence of record as an underlying issue in the claim for service connection for PTSD. 4. The original notice of disagreement for the claim of whether new and material evidence had been submitted was received on or after November 18, 1988. 5. The claimant was retained within one year of the July 21, 1992, Board decision. 6. A fee agreement signed by the parties in July 1993 provides for direct VA payment to the claimant of a contingency fee consisting of 20 percent of past-due benefits awarded to the veteran. 7. By an April 17, 1996 decision, the RO granted the veteran entitlement to a TDIU. 8. The claimant rendered legal services involving the veteran's VA claim for a TDIU. CONCLUSIONS OF LAW 1. The criteria for a valid fee agreement between the attorney and the veteran as to VA representation have been met with respect to the veteran's claim for a TDIU. 38 U.S.C.A. § 5904(c)(1) (West 1991 & Supp. 1999); 38 C.F.R. § 20.609(c), (h) (1999). 2. The fee specified in the agreement as being payable directly to the claimant in the amount of 20 percent of past- due benefits awarded to the veteran is presumed to be reasonable and may be paid from past-due benefits created by the RO's April 17, 1996, grant of a TDIU. 38 U.S.C.A. § 5904(d) (West 1991 & Supp. 1999); 38 C.F.R. § 20.609(f), (h) (1999). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veterans Judicial Review Act (VJRA, Public Law 100-687, 102 Stat. 4105 (1988)) allows VA claimants to enter into agreements with attorneys and agents for the payment of fees for services in representing them in VA proceedings, provided that the fees are neither "unreasonable" nor "excessive." Before enactment of the VJRA, the fees which could lawfully be charged by attorneys and accredited agents in VA proceedings had been limited to $10 since the 1860's. See Walters v. National Association of Radiation Survivors, 473 U.S. 305 (1985). A fee may now be charged if, and only if, the following conditions are met: (1) A final decision must have been promulgated by the Board with respect to the issue, or issues, involved. Fees may neither be charged, allowed, nor paid for services provided before the date on which the Board first makes a final decision on the case. 38 U.S.C.A. § 5904(c)(1) (West 1991 & Supp. 1999); 38 C.F.R. § 20.609(c)(1) (1999). (2) The Notice of Disagreement which preceded the Board decision with respect to the issue, or issues, involved must have been received by the RO on or after November 18, 1988. VJRA § 403, 102 Stat. 4122; 38 C.F.R. § 20.609 (c) (2) (1999). (3) The attorney at law or agent must have been retained not later than one year following the date on which the decision of the Board with respect to the issue, or issues, involved was promulgated. 38 U.S.C.A. § 5904(c)(1) (West 1991 & Supp. 1999); 38 C.F.R. § 20.609(c)(3) (1999). If an increased evaluation is subsequently granted as the result of an appeal of the disability evaluation initially assigned by the agency of original jurisdiction, and if the attorney-at-law represents the claimant or appellant in that phase of the claim, the attorney-at-law 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. § 20.609 (h) (3) (i) (1999). The VA Office of General Counsel has determined that in a case where the Board has denied reopening of a claim for service connection based on failure to submit new and material evidence and that determination is reversed by the Court and service connection is ultimately allowed, attorney fees may be paid. The Board decision to deny reopening, and the Court decision vacating the Board decision were final as to the issue involved. VAOPGCPREC 37-97 (December 16, 1997). Eligibility to receive attorney fees stemming from past-due benefits as a result of the RO's April 17, 1996, rating decision. In June 1990, the Board denied the veteran's claim for service connection for an acquired psychiatric disorder, to include PTSD. On July 21, 1992, the Board determined that the veteran had not submitted new and material evidence in order to reopen a claim of service connection for PTSD. On April 23, 1993, the Court vacated the July 1992 Board decision. In a January 1995 rating decision, the RO granted service connection for PTSD and assigned a 30 percent rating. In an April 1996 rating decision, the RO granted the veteran entitlement to a TDIU. The July 1992 Board decision and the April 1993 Court decision which vacated it were final with respect to the issue of service connection for PTSD. VAOPGCPREC 37-97 (December 16, 1997). The notice of disagreement which preceded the July 1992 Board decision was received by the RO after November 18, 1988. There is evidence that the claimant had been retained by July 15, 1993, or within one year after the July 1992 Board decision. In November 1999, the Court determined that pursuant to 38 C.F.R. § 20.609 (h), the veteran's TDIU claim was raised by the evidence of record as an underlying issue in his PTSD claim appealed to the Court in April 1993. Therefore, the three statutory and regulatory criteria necessary for the attorney to charge a fee for his services regarding the claim of a TDIU have been met. 38 U.S.C.A. § 5904(c)(1) (West 1991 & Supp. 1999); 38 C.F.R. § 20.609(c), (h) (1999). The law specifies that the total fee payable to an attorney may not exceed 20 percent of the total amount of any past-due benefits awarded in the veteran's claim. 38 U.S.C.A. § 5904(d) (West 1991 & Supp. 1999). Fees totaling no more than 20 percent of any past-due amounts are presumed to be reasonable. 38 C.F.R. § 20.609(f) (1999). The attorney fee agreement executed between the parties in July 1993 provides for direct VA payment to the claimant of a contingency fee consisting of 20 percent of past-due benefits awarded to the veteran, but no more. Therefore the attorney fee agreement satisfies the criteria pursuant to 38 U.S.C.A. § 5904 (d) and 38 C.F.R. § 20.609 (f). The RO granted entitlement to a TDIU on April 17, 1996, which resulted in the creation of past-due benefits. Attorney fees are payable for past-due benefits stemming from the grant of a TDIU. The evidence shows that the attorney performed work on the veteran's claim for a TDIU after the July 1992 Board decision. Calculation of past-due compensation payable to the appellant. In preparation for referral of the attorney fee entitlement issue to the Board, the RO made preliminary calculations of the dollar amount of past-due compensation payable to the appellant and of the portion potentially payable to the attorney. These figures were furnished to the parties by letter dated September 16, 1996. As described below, the amount payable as attorney fees following the April 17, 1996, RO rating decision granting entitlement to a TDIU will have to be revised. The period of past-due benefits stems from the grant of a TDIU. Since the grant of a TDIU was made effective from August 29, 1990, compensation based on this rating is payable to the appellant from September 1, 1990, as that is the first day of the following month. 38 U.S.C.A. § 5111 (West 1991). In its calculation of past-due benefits, the RO correctly chose September 1, 1990, as the effective date of the increase in benefits. Calculation by the RO of the amount of past-due benefits created by the April 1996 RO rating decision must also comply with the provisions of 38 C.F.R. § 20.609(h)(3) (1999), which states that the termination date of the period of past-due benefits for attorney fee purposes is the date of the award, not the last day of the month of the award. As the date of the award was April 17, 1996 (date of the RO decision), the termination date of the period of past-due benefits for attorney fee purposes will be April 17, 1996. As the RO chose April 30, 1996, as the termination date of the period of past-due benefits for attorney fee purposes, the RO should recalculate the figures accordingly to reflect the fact that the correct termination date is April 17, 1996. In summary, the attorney is entitled to payment of 20 percent of the past-due benefits stemming from the grant of a TDIU for the period between September 1, 1990, and April 17, 1996. ORDER Eligibility for payment of attorney fees for services rendered before the VA is established. The attorney should be paid 20 percent of past-due benefits awarded the veteran for a TDIU for the period from September 1, 1990, through April 17, 1996. BARBARA B. COPELAND Member, Board of Veterans' Appeals