BVA9500251 DOCKET NO. 94-03 516 ) DATE ) ) Related to a decision of the Department of Veterans Affairs Regional Office in White River Junction, Vermont THE ISSUE Eligibility for payment of attorney fees from past-due benefits. ATTORNEY FOR THE BOARD S. L. Kennedy, Counsel INTRODUCTION This matter came before the Board of Veterans' Appeals (Board) following a June 1994 rating decision of the White River Junction, Vermont, Department of Veterans Affairs (VA) decision which effectuated a March 1994 Hearing Officer decision granting service connection for tinnitus and assigning a 10 percent evaluation effective from August 25, 1992. The veteran and his attorney, S.P., parties to the fee agreement in question in this case, were notified by the RO by letter dated in August 1994 that the case was being transferred to the Board for a determination concerning eligibility for payment of attorney fees out of past- due benefits by the VA to attorney S.P. The case was transferred to the Board, and by letter dated in October 1994, the parties were given 30 days from the date of that letter to submit additional evidence or argument directly to the Board on the fee agreement issue. No additional evidence or argument was forthcoming, and the case is now ready for appellate review. CONTENTIONS The parties in this case have made no specific contentions regarding whether the fee should be paid or whether or not the fee is reasonable. DECISION OF THE BOARD The Board, in accordance with the provisions of 38 U.S.C.A. § 7104 (West 1991), has reviewed and considered all of the evidence and material of record in the veteran's claims file. Based on its review of the relevant evidence in this matter, and for the following reasons and bases, it is the decision of the Board that the evidence is against eligibility for payment of attorney fees from past-due benefits. FINDINGS OF FACT 1. The veteran served on active duty from August 1986 to August 1992. 2. The RO received a claim for entitlement to service connection for tinnitus in June 1993. The RO denied service connection for tinnitus in a September 1993 rating decision. 3. In November 1993, the veteran entered into an agreement to pay a fee to attorney S.P. for representational services before the VA on the issue of the RO denial of service connection for tinnitus. 4. In a March 1994 decision, the Hearing Officer at the RO determined that service connection for tinnitus was warranted. 5. In a June 1994 rating decision, the RO effectuated the Hearing Officer's decision granting service connection for tinnitus; a 10 percent disability rating for that disorder was established effective from August 25, 1992. 6. There is no prior final Board decision on the issue of service connection for tinnitus. CONCLUSION OF LAW The criteria for a valid fee agreement between the attorney and the veteran for representational services before the VA have not been met. 38 U.S.C.A. § 5904(c)(1) (West 1991); 38 C.F.R. § 20.609(c) (1993). REASONS AND BASES FOR FINDINGS AND CONCLUSION Fees which could be lawfully charged by attorneys at law and accredited agents for services and proceedings before VA have been limited to $10 since the 1860's. See Walters v. National Ass'n of Radiation Survivors, 473 U.S. 305 (1985). The Veterans Judicial Review Act (VJRA), Pub.L. 100-687, 102 Stat. 4105 (1988), now allows VA claimants and appellants to enter into agreements with attorneys and agents for the payment of fees for services in representing them in proceedings before VA, as long as the fees are neither "unreasonable" nor "excessive." A fee may be charged of the claimant or appellant 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): 38 C.F.R. § 20.609(c)(1) (1993). (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 (1993). (3) The attorney-at-law or agent must have been retained not later than one year following the date that the decision by the Board with respect to the issue, or issues, involved was promulgated. 38 U.S.C.A. § 5904(c)(1) (West 1991); 38 C.F.R. § 20.609(c)(3) (1993). In the instant case, the veteran was separated from active duty in August 1992. He filed a claim for service connection for tinnitus in June 1993. The RO initially denied this claim as well as additional claims unrelated to the instant case in a September 1993 rating decision. In October 1993, the RO received from attorney S.P., a notice of disagreement regarding the issue of service connection for tinnitus along with a statement regarding representational services before the VA on the veteran's behalf. The RO also received a fee agreement entered into between the veteran and attorney S.P., dated and received in November 1993, whereby the veteran agreed to pay attorney S.P., in pertinent part, 20 percent of the total amount of any past-due benefits related to the claim for service connection for tinnitus. Subsequently, the RO issued a statement of the case on the issue of service connection for tinnitus. The veteran appeared and presented testimony on this issue before a Hearing Office at the RO in January 1994. A substantive appeal was received in January 1994. In a decision signed and dated in March 1994, the Hearing Officer determined that service connection for tinnitus was in order in this case. The RO implemented the grant of service connection for tinnitus in a June 1994 rating decision; a 10 percent evaluation was assigned for that disorder effective from August 25, 1992. In a letter dated in August 1994, the veteran was notified of the favorable decision in this case, and he was informed that the award authorized payment of 80 percent of the past-due benefits with the remaining 20 percent being withheld pending a decision regarding eligibility for payment of attorney fees from past-due benefits by the Board. Under the governing legal criteria, a fee may not be "charged, allowed, or paid for services of agents and attorneys with respect to services provided before the date on which the Board of Veterans' Appeals first makes a final decision in the case." 38 U.S.C.A. § 5904(c)(1) (West 1991). In a precedent opinion, the VA's Office of General Counsel cited an analysis of the legislative history of the VJRA contained in the United States Court of Veterans Appeals (Court) decision in In the Matter of Smith, 1 Vet.App. 492, 508-09 (1991) (Steinberg, J., concurring), which highlighted the fact that Congress only envisioned paid attorney representation after the Board first enters a final decision on a claim. The General Counsel concluded that an attorney may not receive or solicit a fee in connection with a representation of a claimant before the Department on a benefits issue until after the Board first issues a final decision on that claim. VA O.G.C. Prec. No. 18-92, 57 Fed. Reg. 49747 (1992). In this case, the Board has never adjudicated the underlying issue of service connection for tinnitus. Hence, there plainly can be no final Board decision on this issue that would bring the fee agreement between the veteran and attorney S.P. within the required statutory and regulatory parameters. Accordingly, under 38 U.S.C.A. § 5904(c)(1) and 38 C.F.R. § 20.609(c)(1), the attorney may not charge the veteran a fee for representational services before VA. In view of the foregoing, the Board finds that attorney S.P. is not entitled to payment of attorney fees under the fee agreement in this case from the veteran's past-due benefits and, thus, eligibility for payment of such benefits is not established. ORDER Eligibility for payment by the VA of attorney fees from past-due benefits is denied. None of the veteran's past-due benefits resulting from the June 1994 rating decision which implemented a March 1994 RO Hearing Officer decision granting service connection for tinnitus should be paid by the VA to the attorney in this case. G. H. SHUFELT Member, Board of Veterans' Appeals (CONTINUED ON NEXT PAGE) The Board of Veterans' Appeals Administrative Procedures Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___ (1994), permits a proceeding instituted before the Board to be assigned to an individual member of the Board for a determination. This proceeding has been assigned to an individual member of the Board. NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C.A. § 5904(c)(2) (West 1991), a finding or order of the Board of Veterans' Appeals upon review of an agent's or attorney's fee agreement may be reviewed by the United States Court of Veterans Appeals under 38 U.S.C.A. § 7263(d) (West 1991). Under 38 U.S.C.A. § 7266 (West 1991), a final decision of the Board of Veterans' Appeals may be appealed to the United States Court of Veterans Appeals by a person adversely affected by the decision within 120 days from the date of mailing of notice of the decision. The date which appears on the face of this decision constitutes the date of mailing and the copy of this decision which you have received is your notice of the action taken by the Board of Veterans' Appeals.