Citation Nr: 0000748 Decision Date: 01/10/00 Archive Date: 01/19/00 DOCKET NO. 99-22 418 ) DATE ) ) THE ISSUE Eligibility for payment of attorney fees from past-due benefits. ATTORNEY FOR THE BOARD N. L. Rippel, Associate Counsel INTRODUCTION The veteran served on active duty from May 1969 to December 1970. This matter comes before the Board of Veterans' Appeals (BVA or Board) from the Department of Veterans Affairs (VA) Regional Office (RO) in Louisville, Kentucky. FINDINGS OF FACT 1. In an April 1991 decision, the Board denied increased ratings for a back disorder, an acquired psychiatric disability and a total rating based on individual unemployability due to service-connected disability (TDIU). 2. The veteran retained his attorney in June 1991 and entered into an attorney fee agreement in April 1992 to appeal the April 1991 decision of the Board to the United States Court of Appeals for Veterans Claims (Court) and to represent the veteran before VA. 3. The veteran's appeal to the Court resulted in the grant of increased evaluations for the rating issues on appeal, in addition to the grant of TDIU. 4. The Board has never entered a final decision with respect to the matter of an earlier effective date for TDIU. 5. The issue of an earlier effective date for TDIU was not underlying the issues successfully appealed to the Court. CONCLUSION OF LAW The requirements for payment of attorney fees pursuant to the April 24, 1992, attorney fee agreement by the VA from past- due benefits for the period between July 10, 1986, and July 11, 1983, for the grant of an earlier effective date for TDIU, have not been met. 38 U.S.C.A. § 5904 (West 1991 & Supp. 1998); 38 C.F.R. § 20.609 (1999). REASONS AND BASES FOR FINDINGS AND CONCLUSION The criteria and requirements for payment of attorney fees by the VA from past-due benefits are contained in 38 U.S.C.A. § 5904 and 38 C.F.R. § 20.609. In order to be able to charge a fee there must be: (1) A final decision promulgated by the Board, (2) a notice of disagreement pertaining to that decision dated on or after November 18, 1988, and (3) the retention of counsel not later than one year after the date of the Board's decision. The statute specifically provides that, "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. Such a fee may be charged, allowed, or paid in the case of services provided after such date only if an agent or attorney is retained with respect to such case before the end of the one- year period beginning on that date." 38 U.S.C.A. § 5904(c)(1). However, the statute also provides that: "The limitation in the preceding sentence does not apply to service provided with respect to proceedings before a court." In the case of In re Fee Agreement of Mason, 13 Vet. App. 79 (1999), the Court noted that 38 U.S.C.A. § 5904(d) authorizes the Secretary to pay directly to an attorney 20 percent of the total amount of any past-due benefits awarded to a veteran on the basis of the claim where the veteran and the attorney entered into a qualifying fee agreement for representation before the Court. "A qualifying fee agreement must specify that the total fee payable under the agreement (1) may not exceed 20% of past-due benefits, (2) is contingent on a favorable resolution of the matter, and (3) will be paid directly to the attorney by the Secretary from the past-due benefits awarded on the basis of the underlying claim. See 38 U.S.C. § 5904(d)(1), (2)." In re Fee Agreement of Mason, 13 Vet. App. at 85. The Court concluded that, "where an attorney successfully represents a VA claimant before this Court and has filed a qualifying attorney-client fee agreement which directs payment by the Secretary from an award of past-due benefits awarded on the basis of the claim filed with VA, the Secretary is obligated to pay directly to the attorney 20% of the past-due benefits awarded on the basis of the claim or application for benefits underlying the issues successfully appealed to this Court." In re Fee Agreement of Mason, 13 Vet. App. at 86, (emphasis in original). In other words, the limitations in section 5904(c)(1) do not apply. In this case, the Board first entered a final decision with respect to the matter of entitlement to increased evaluations for a psychiatric disorder, a back disorder and TDIU in April 1991. The veteran and his attorney entered into an attorney fee agreement in April 1992 and, as noted in a July 1994 Board decision concerning attorney fees, representation of the veteran by the attorney was actually begun in June 1991. The attorney and the veteran appealed the Board's 1991 decision to the Court. In May 1993, the Court issued a Memorandum Decision reversing the Board decision and returning the case to the Board. The Court ordered the Board to: (1) assign an increased rating of 60 percent for the appellant's service-connected back disability; (2) assign the appropriate rating for anxiety disorder (not less than 50 percent); and (3) grant TDIU. The Court added that upon award of TDIU, the Board should establish an effective date in accordance with applicable laws and regulations. In August 1993, the Board issued a decision assigning a 70 percent evaluation for anxiety reaction with dysthymic disorder and instructing the RO to assign the 60 percent rating for the back disorder and to assign the TDIU. Citing due process reasons, the Board referred the issue of effective dated back to the RO for appropriate action in accordance with applicable laws and regulations. A rating decision dated in November 1993 effectuated the Board's decision and assigned a 70 percent for anxiety reaction and a 60 percent for the low back disorder, and TDIU, each effective from June 1987. This decision resulted in past-due benefits being payable to the veteran, and in a July 1994 decision, the Board allowed an award of attorney fees from past due benefits based on the period from June 8, 1987, to November 8, 1993. Administrative records show that the veteran's attorney was paid $9,673.20, which was 20 percent of the veteran's total past-due benefits award of $38,692.80. In March 1994, the veteran filed a Notice of Disagreement with the effective date of the award of benefits for the rating claims and the TDIU. The veteran explained that he sought an effective date of 1970. The veteran also stated that his attorney no longer represented him. In a January 1995 rating decision, the veteran was awarded an effective date of July 10, 1986, for the two rating issues as well as the TDIU. In April 1995, the attorney was advised of the award, but responded in a timely fashion that he had no attorney fee interest in any past due benefits arising from that award and that he no longer represented the veteran. The veteran continued to appeal the effective date of the rating claims as well as the TDIU. In September 1995, the veteran's attorney submitted a VA Form 22a, Appointment of Attorney as Claimant's Representative, accompanied by a letter stating that his office was in fact again representing the veteran in his claim for VA benefits. In a letter to the attorney dated in October 1995, the RO observed that the veteran currently had a claim for earlier effective date of his 'service-connected rating' pending which was currently being held at the RO prior to Board review. In October 1996, the Board issued a decision remanding the claims for earlier effective date for the back disorder, anxiety reaction and TDIU. Following additional development, the case was returned to the Board, and, in August 1999, the Board issued a decision granting an effective date of July 11, 1983, for TDIU, but denying an earlier effective date for either rating issue. In September 1999, the RO effectuated the Board's August 1999 decision. In October 1999, the RO issued a letter to the veteran and his attorney indicating that past-due benefits were payable in the amount of $28,758.00, based on the grant of the earlier effective date for the TDIU, and that 20 percent of that amount, $5,751.60, was being withheld as the maximum attorney fee payable. Based on this evidence and sequence of events, and, despite the veteran's successful appeal to the Court of the actual TDIU issue, the Board concludes, for the following reasons, that the requirements for payment of attorney fees from past- due benefits for the award of an earlier effective date for the TDIU have not been met. It is uncontroverted that there has been no final Board decision with respect to the issue of an earlier effective date for TDIU. Neither the 1991 nor the 1996 Board constituted a final decision by the Board denying the issue of effective date for TDIU, the issue which is the basis for the currently withheld past-due benefits. However, the Board must address whether the issue of an effective date for TDIU was, as set forth in Mason, underlying the issues successfully appealed to the Court. See In re Fee Agreement of Mason, 13 Vet. App. at 85. In such a case, the limitations in section 5904(c)(1) do not apply and the Secretary is obligated to pay directly to the attorney 20% of the past-due benefits awarded regardless of whether there had been a previous Board denial. In this case, the Board finds that the issue of the effective date of the TDIU was not underlying the issues successfully appealed to the Court. The issue of TDIU was indeed the subject of the 1991 Board denial and the Court did make reference to the assignment of an effective date for the TDIU. However, the Board is persuaded by its review of the record that the claims are separate and should be treated as such. In this regard, the veteran's Notice of Disagreement dated in 1989 was with the issue of the grant of TDIU and increased ratings. There is no reference to the effective date sought. The Federal Circuit Court has unequivocally set forth, and the Court has thereafter held, that service connection, rating issues and effective date issues are separate, and that effective date issues are downstream in relation to the other issues. See Grantham v. Brown, 114 F 3d 1156, 1158 (Fed. Cir. 1997), Holland v. Gober, 10 Vet. App. 433 (1997). Although the Court made reference to the effective date of a TDIU in its 1993 Memorandum Decision, assignment of effective date was not an issue in the Board decision in 1991. The Board determines that although the issue of TDIU and the effective date of the award are related in obvious ways, they are separate in that one is downstream from the other. Ultimately, the Board concludes that the effective date is not underlying the issue of TDIU. While the Board recognizes that equating the concepts of downstream issues and underlying issues would be an oversimplification and an inaccuracy, it finds little support to conclude that the effective date issue is underlying the grant of TDIU in this instance. Accordingly, the Board concludes that attorney fees from past-due benefits are not payable for the period between July 10, 1986, and July 11, 1983, for the grant of an earlier effective date for TDIU. ORDER Attorney fees from past-due benefits for the period from July 10, 1986, to July 11, 1983, for the grant of an earlier effective date for TDIU may not be awarded by the VA pursuant to the April 24, 1992, attorney fee agreement. RAYMOND F. FERNER Acting Member, Board of Veterans' Appeals