BVA9501622 DOCKET NO. 95-00 246 ) DATE ) ) THE ISSUE Eligibility for payment of attorney fees from past-due benefits. ATTORNEY FOR THE BOARD Brain J. Milmoe, Counsel INTRODUCTION The veteran served on active duty from November 1942 to December 1945. In April 1992 the Board of Veterans' Appeals (BVA or Board) remanded to the Department of Veterans Affairs (VA) Regional Office (RO) in Seattle, Washington the issues of entitlement to service connection for impotence and the loss of use of the left lower extremity, as well as a claim for a total rating based on individual unemployability, due to service-connected disabilities. Those issues were remanded to BVA by the United States Court of Veterans Appeals (Court) in December 1991, pursuant to a joint motion. [citation redacted]. While the case was in a remand status, the RO in a November 1994 rating action established service connection for impotence, with a noncompensable rating effective from August 25, 1987, and granted special monthly compensation (SMC) under 38 U.S.C.A. § 1114 (k) and 38 C.F.R. § 3.350(a) on account of loss of the veteran’s loss use of a creative organ effective from August 25, 1987. The RO additionally found that the veteran was entitled to a total rating based on individual unemployability, due to service-connected disabilities, effective from September 27, 1984. The RO confirmed and continued the prior denial of service connection for loss of use of the left lower extremity, and the veteran has requested that he be afforded a hearing before BVA, sitting in Seattle, Washington. The request for a travel board hearing was acknowledged by BVA in December 1994, and no further action regarding that matter will occur until after the completion of the requested hearing. This decision as to attorney fees applies only to those benefits granted as a result of the RO's November 1994 action. In correspondence from the RO, dated in November 1994, the veteran and his attorney were advised that the case was being transferred to BVA for a determination concerning eligibility for payment of attorney fees from past-due benefits, and that any additional evidence or argument concerning the attorney fees issue should be submitted to BVA within 30 days. A response from the attorney was received by BVA in December 1994. CONTENTIONS No contentions regarding the matter at issue have been advanced by the veteran, although the veteran's attorney has stated that his office spent an extraordinary amount of time and effort in representing the veteran before VA. Reportedly, the issues presented by the veteran's case were complex DECISION OF THE BOARD BVA has reviewed and considered all of the evidence and material of record in the veteran's claims file. Based on its review and consideration of the relevant evidence in this matter, and for the following reasons and bases, it is the BVA's decision that the record supports eligibility for the payment of attorneys fees from past-due benefits, but only as they pertain to the grant of SMC for loss of use of a creative organ. The evidence is against eligibility for payment of attorneys fees for past-due benefits pertaining to the grant of a total rating based on individual unemployability, due to service-connected disabilities. FINDINGS OF FACT 1. BVA entered a decision on the claim of entitlement to a total rating based on individual unemployability in May 1989, but the notice of disagreement leading to the BVA decision was filed prior to November 18, 1988, and the veteran's attorney is not shown to have been retained within the one-year period following the May 1989 BVA decision. 2. The BVA denied entitlement to service connection for impotence in a September 1990 decision; a notice of disagreement was filed; the attorney was retained within one-year of entry of the BVA's decision; and legal services were thereafter rendered by the veteran's attorney before VA. 3. Past-due benefits are payable to the veteran based on the November 1994 RO rating decision granting SMC for loss of use of creative organ and for a total rating based on individual unemployability, due to service-connected disabilities. No past- due benefits are payable for the grant of service connection for impotence, given the noncompensable schedular rating assigned therefor. 4. The veteran has executed a written fee agreement for legal representation of his interests before VA by the attorney in question and the agreement is specific as to the percentage of past-due benefits to be paid. 5. The fee agreement provides in effect that the fee earned by the attorney is payable by VA directly to the attorney upon favorable resolution of the veteran's claim in whole or in part. CONCLUSIONS OF LAW 1. The criteria for a valid fee agreement between the attorney and the veteran for representational services before the VA/BVA have not been met with respect to the issue of entitlement to a total disability evaluation based on individual unemployability. 38 U.S.C.A. § 5904(c) (West 1991); 38 C.F.R. § 20.609 (1994). 2. The criteria for a valid fee agreement between the attorney and the veteran for representational services before the VA/BVA have been met with respect to the issue of entitlement to service connection for impotence, and the inextricably intertwined claim of entitlement to special monthly compensation for the loss of use of a creative organ. 38 U.S.C.A. § 5904(c) (West 1991); 38 C.F.R. § 20.609 (1994). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veterans Judicial Review Act, (VJRA), Pub.L. 100-687, 102 Stat. 4105 (1988) allows VA claimants to enter into agreements with attorneys to represent them in proceedings before VA as long as the fee charged is neither "unreasonable" nor "excessive." A fee may be charged a claimant if all of 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 prior to the date of the Board’s decision. 38 U.S.C.A. § 5904(c)(1); 38 C.F.R. § 20.609(c)(1). 2. The notice of disagreement which preceded the Board’s decision with respect to the issue, or issues, involved must have been received by the agency of original jurisdiction on or after November 18, 1988. VJRA § 403, 102 Stat. at 4122; 38 C.F.R. § 20.609(c)(2). 3. The attorney at law 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); 38 C.F.R. § 20.609(c)(2). If any of the foregoing criteria is lacking, a fee may not be charged. The Claim for a Total Disability Evaluation Based on Individual Unemployability. The record shows that the RO denied a total disability evaluation based on individual unemployability in a June 1987 rating decision. The veteran filed a notice of disagreement to that decision in July 1987, and in May 1989 the Board denied the claim. In April 1992, the Board remanded the issue of entitlement to a total disability evaluation based on individual unemployability to the RO for consideration following a December 1991 order by the Court directing that the Board address this issue in addition to other issues addressed in a September 1990 BVA decision. The RO granted a total disability evaluation based on individual unemployability in a November 1994 decision. From the foregoing it is evident that the Board of Veterans’ Appeals on one occasion addressed the issue of entitlement to a total disability evaluation based on individual unemployability. The Board gained jurisdiction over that issue, however, based on a notice of disagreement filed in July 1987, and the Board’s May 1989 decision on that issue is final. Accordingly, the RO’s November 1994 award of a total disability evaluation was based on the review of a new claim which was never the subject of a prior Board decision. See generally, Proscelle v. Derwinski, 2 Vet.App. 629, 631 (1992) (A claim for an increase in compensation is a new claim.) In the absence of a final decision by the Board on the claim ultimately allowed by the RO in November 1994, attorney fees may not be charged. Indeed, attorney fees may not be charged in view of the fact that the only notice of disagreement filed with respect to the issue of individual unemployability is that filed in July 1987, a date prior to November 18, 1988. Therefore, the Board finds that no fee may be paid to the attorney based on past due benefits as a result of the RO’s November 1994 award of individual unemployability. The Claim of Entitlement to Service Connection for Impotency. The record shows that the RO denied service connection for impotency in an April 1988 rating decision. The representative filed a VA Form 646 on behalf of the veteran in August 1988 which constitutes the notice of disagreement to the April 1988 rating decision. In September 1990, the Board denied service connection for impotency. The veteran appealed to the Court, and in December 1991, the Court vacated the Board’s September 1990 decision. In April 1992, the Board identifying a June 1989 statement as the notice of disagreement, remanded the veteran’s claim for further development. In November 1994, the RO granted service connection for impotency, and assigned a zero percent rating. Concurrently with that award the RO granted special monthly compensation based on the loss of use of a creative organ. The Board must initially determine whether or not there is a final Board decision with respect to the underlying issues involved. Here, the Board’s September 1990 decision clearly addressed the veteran's entitlement to service connection for impotency. Moreover, because the issue of entitlement to special monthly compensation was inextricably intertwined, see generally, Hoyer v. Derwinski, 1 Vet.App. 208 (1991), the Board concludes that there is a final BVA decision with respect to that issue as well. The Board now turns to whether or not the notice of disagreement which preceded the Board’s decision was received by the RO on or after November 18, 1988. In this respect it is first evident that the Board’s April 1992 reference to a June 1989 statement as being the veteran’s notice of disagreement was clearly and unmistakably erroneous. Indeed, if the June 1989 statement was the notice of disagreement the Board would have been divested of jurisdiction over the veteran’s claim because the underlying rating decision was entered in April 1988. 38 U.S.C.A. § 7105 (West 1991). Rather, the notice of disagreement in question was received in August 1988. Still, the Court in this case found that they had jurisdiction over the veteran’s claim, notwithstanding § 402 of title IV of the Veterans Judicial Review Act, Pub.L. 100-687, which limits the Court’s jurisdiction to cases in which a notice of disagreement was filed on or after November 18, 1988. The Court’s decision to find that they had jurisdiction was undoubtedly based on the now repudiated "multiple notice of disagreement" rule set forth in Whitt v. Derwinski, 1 Vet.App. 40 (1990), overruled in Hamilton v. Brown, 4 Vet.App. 528 (1993). In light of the Court’s action, however, and because "the judicial overruling of a precedent should not be given retroactive effect where this would interfere with rights, especially contractual rights, duly acquired pursuant to the law as it prevailed prior to the overruling decision," 20 AM.JUR.2D Courts § 235 (1965), the Board concludes the fee agreement entered into sometime following the Board’s September 1990 decision was based on justifiable reliance on the principle set forth in Whitt. The Board must next determine whether the attorney was retained not later than one year following the date that of the BVA’s promulgation of the underlying decision. In this respect, the attorney fee agreement is notable for the failure on the part of the attorney to date or sign it, see 38 C.F.R. § 20.609(g) (1994), and for his failure to have the veteran’s mark witnessed. See 38 C.F.R. § 3.113 (1994). Still, the record does reflect that the attorney filed a brief with the Court on October 4, 1991. In light of this fact, we believe it to be a virtual certainty that the attorney began his work on his brief prior to the expiration of one year period following the Board’s September 25, 1990, decision. Accordingly, while the specific compliance is not evident from the record, we conclude that the attorney substantially complied with the requirements of 38 C.F.R. § 20.609(c)(2), and that the Board may now explore whether the attorney’s fee may be paid from past due benefits that were awarded the veteran for impotency, and for special monthly compensation based on his loss of use of a creative organ. Under 38 U.S.C.A. § 5904(d), the total fee payable to the attorney may not exceed 20 percent of the total amount past-due benefits on the basis of the claim. While the undated attorney fee agreement states that the 20 percent fee is "in addition to any other cause of action resulting in such disability or injury," the Board concludes that the term "cause of action" refers to claims outside the realm of the VA’s adjudication system. (E.g. A claim pertaining to a superimposed back injury caused by a recent traffic accident.) Hence, as past due benefits from VA are limited to 20 percent in the fee agreement, and as fees which total no more than 20 percent are presumed reasonable, see 38 C.F.R. § 20.609(f) (1994), past due benefits may be paid to the attorney based on the veteran’s award of special monthly compensation for the loss of use of a creative organ. No past due benefits may be paid to the attorney based on the veteran’s award of service connection at the noncompensable rate for impotency in light of the fact that no past due benefits are payable based on such an award. The effective date of the award of special monthly compensation was established by the RO as August 25, 1987. The RO’s determination granting special monthly compensation was entered on November 8, 1994. As such, the inclusive dates for the purpose of entitlement to attorney fees based on the veteran’s receipt of past due benefits from special monthly compensation only are August 25, 1987, to November 8, 1994. ORDER Eligibility for payment of attorney fees from past-due benefits paid to the veteran in connection with the RO's grant of a total rating based on individual unemployability, due to service- connected disabilities in November 1994, is denied. None of the veteran's past-due benefits resulting from the grant of a total rating should be paid to the attorney. Eligibility for payment of attorney fees from past-due benefits for the RO's grant of service connection for impotency in November 1994 is not established due to the lack of any past due benefits being due. Eligibility for direct payment by VA of the attorney's fee totaling no more than 20 percent of past-due benefits from the RO's grant of SMC for loss of use of a creative organ in November 1994, is established. DEREK R. BROWN Member, Board of Veteran' Appeals 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.