Citation Nr: 0000743 Decision Date: 01/10/00 Archive Date: 01/19/00 DOCKET NO. 99-21 078 ) 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 September 1975 to September 1979. This matter comes before the Board of Veterans' Appeals (BVA or Board) from the Department of Veterans Affairs (VA) Regional Office (RO) in Chicago, Illinois. FINDINGS OF FACT 1. The Board entered a final decision on the underlying issue in question on February 4, 1997; a notice of disagreement was received by VA after November 18, 1988; and the veteran retained an attorney in July 1997, within one year of the date of the Board's decision. 2. On July 17, 1997, the veteran and his attorney entered into a contingent attorney fee agreement, which provided that 20 percent of past-due benefits were to be paid by the VA to the veteran's attorney. 3. A September 1999 RO decision granted service connection for spondylolisthesis, L5-S1, status post laminectomy, evaluated as 60 percent disabling, effective from March 30, 1992, and this determination resulted in past-due benefits being payable to the veteran. CONCLUSION OF LAW The requirements for payment of attorney fees from past-due benefits by the VA pursuant to the terms of the July 17, 1997, attorney fee agreement, for the receipt of compensation for service-connected spondylolisthesis, L5-S1, status post laminectomy, for the period of time between March 30, 1992, and September 28, 1999, have been met. 38 U.S.C.A. § 5904 (West 1991 & Supp. 1999); 38 C.F.R. § 20.609 (1999). REASONS AND BASES FOR FINDINGS AND CONCLUSION A determination of basic eligibility for attorney fees paid by the VA from past-due benefits requires: (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. See 38 U.S.C.A. § 5904(c); 38 C.F.R. § 20.609(c). In this case, the Board issued a decision on February 4, 1997, finding that new and material evidence had not been submitted to reopen the claim of entitlement to service connection for spondylolisthesis which had been denied in a 1989 rating decision. Thereafter, the veteran and his attorney entered into an attorney fee agreement to represent the veteran in his claim for VA benefits denied in the February 1997 Board decision. At that time, the veteran was appealing the denial of this claim to the United States Court of Appeals for Veterans Claims (Court). The attorney fee agreement called for the attorney to be paid on a contingent basis 20 percent of any past-due benefits directly by the VA. In September 1998, the Court issued a Memorandum Decision reversing the Board decision on the issue of whether new and material evidence had been received to reopen the claim for a back disorder and remanding the case to the Board for de novo review of the issue of service connection for a low back disorder on the merits. In March 1999, the Board issued a decision remanding the case to the RO for development consistent with the Court decision. Following the submission of additional evidence and additional examination of the veteran, the RO granted service connection for spondylolisthesis, L5-S1, status post laminectomy in a September 28, 1999, rating action, and assigned a 60 percent evaluation, effective from March 30, 1992. Also in that same rating decision, the RO granted service connection for external otitis and tinnitus, each evaluated at 10 percent, effective from February 1994. Thereafter, by letter dated October 14, 1999, the veteran and his attorney were informed as to past-due benefits and the amount withheld for attorney fees. Based on this evidence, the Board finds that the July 17, 1997, attorney fee agreement satisfied the eligibility requirements under 38 U.S.C.A. § 5904(c) and 38 C.F.R. § 20.609(c). Clearly the record includes a final decision promulgated by the Board, a notice of disagreement pertaining to that decision dated in January 1990, thus after November 18, 1988, and documentation reflecting the retention of counsel within one year of the Board's decision. Therefore, all of the statutory criteria for payment of attorney's fees directly by VA out of past-due benefits have been met. See 38 U.S.C.A. § 5904(d). Thus, the regulatory requirements have been met because the total fee (excluding expenses) required in the agreement does not exceed 20 percent of the total amount of past-due benefits awarded, the amount of the fee is contingent on whether the claim is resolved in a manner favorable to the veteran, and, as reflected in the RO's October 1999 letter, the award of past-due benefits resulted in a cash payment to the veteran from which a fee may be deducted. See 38 C.F.R. § 20.609(h)(1). However, in the aforementioned letter to the veteran and his attorney, the RO indicated that past-due benefits had been computed as $69,311.00, and that 20 percent of that amount or $13,862.20, representing the maximum past-due benefits allowable for attorney fees, was being withheld from the veteran's award pending a determination by the Board regarding the award of attorney fees in this case. The Board notes that this award appears to have been calculated based upon additional service-connected disabilities for which the attorney did not represent the veteran, which were not previously denied by the Board, and were not related to the issue denied by the Board in February 1997. These disabilities include external otitis and tinnitus. Thus, it would appear that the attorney is not entitled to the entire $13,862.20 set aside by the RO. Under the law, the Board may order a reduction in the fee called for in the agreement if the Board finds that the fee is "excessive or unreasonable." Matter of Fee Agreement of Smith, 4 Vet. App. 487, 492 (1993), vacated in part on other grounds sub nom. In re Wick, 40 F.3d 367 (Fed. Cir. 1994); Matter of the Fee Agreement of Vernon, 8 Vet. App. 457, 459 (1996). The Board notes that under 38 C.F.R. § 20.609(f), fees that total no more than 20 percent of any past-due benefits awarded will be presumed to be reasonable. The Board concludes that the fee agreed to in the fee agreement involved in this case is neither excessive nor unreasonable and is presumed to be reasonable. See Matter of Fee Agreement of Smith, 4 Vet. App. at 492. However, the Board notes that the figure noted by the RO in its October 1999 letter appears to include past-due benefits connected with the grant of service connection for the low back disorder, external otitis and tinnitus, rather than just the low back disorder. As such, the Board notes that recalculation will be required in order to determine the exact amount payable to the attorney based upon the grant of service connection exclusively for spondylolisthesis, L5-S1, status post laminectomy. As observed by the veteran's attorney in her October 20, 1999, letter, the 20 percent fee should be limited to the retroactive award for the spondylolisthesis claim. Consequently, the Board concludes that the requirements of 38 U.S.C.A. § 5904(d) and 38 C.F.R. § 20.609(h), for payment of the attorney's fee by VA from past-due benefits relating to the grant of compensation for spondylolisthesis, L5-S1, status post laminectomy, are met concerning the past-due benefits. Past-due benefits is defined in 38 C.F.R. § 20.609(h)(3) as [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 the Board . . . or the lump sum payment which represents the total amount of recurring cash payments which 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 agency of original jurisdiction, the Board . . ., or an appellate court. In this case, the proper amount of the past-due benefits is the lump sum payment representing the total amount of recurring cash payments, stemming from the issue of spondylolisthesis, L5-S1, status post laminectomy, only, that accrued between the effective date of the award, i.e., March 30, 1992, and the date of the grant of the benefit by the RO, i.e., September 28, 1999. Thus, the attorney is entitled to payment of 20 percent of the amount of the award for spondylolisthesis, L5-S1, status post laminectomy, accrued between those two dates. See 38 C.F.R. § 20.609(h)(3)(i) (1999). Payment of monetary benefits based, as here, on an award of service connection may not be made for any period prior to the first day of the calendar month following the month in which the award became effective. See 38 U.S.C.A. § 5111(a) (West 1991); 38 C.F.R. § 3.31 (1999). Hence, the actual payment of monetary benefits was effective from April 1, 1992, as the veteran and his attorney were advised by the previously noted correspondence from the RO. ORDER Eligibility for payment directly by VA to the veteran's attorney is established, and the attorney should be paid 20 percent of the veteran's past-due benefits awarded the veteran solely for the grant of service connection for spondylolisthesis, L5-S1, status post laminectomy, from the effective date of March 30, 1992, to September 28, 1999. S. L. KENNEDY Member, Board of Veterans' Appeals